Australia’s capital-markets regulator has issued a stark warning that the country risks ceding its competitive edge in the face of accelerating global adoption of tokenised assets.

Speaking at a national forum, the chair of the Australian Securities and Investments Commission (ASIC), Joe Longo, told industry and government leaders that Australia remains “too comfortable with the status quo”.

He argued that while overseas jurisdictions press ahead with blockchain-based market infrastructure, Australian issuers and investors could be pushed offshore if domestic conditions fail to adapt.

Longo said tokenisation is transforming asset-markets by allowing private equity, fixed income and other traditionally illiquid or high-entry-barrier products to be split into smaller units and traded instantly on a global basis.

“Once, Australia was one of the early adopters of innovation in markets… Now, other countries are outpacing us,” he cautioned, stating that the nation faces a stark choice: to innovate or stagnate.

In his remarks, Longo noted that global firms such as J.P. Morgan foresee a near-term future in which money-market funds will be fully tokenised, allowing investors to “keep earning while value is moving instantly”.

He framed this shift as a direct challenge to Australia’s current market infrastructure and stated that failure to act could render the country “the land of missed opportunity”.

Industry observers welcomed Longo’s intervention as a clear signal from Australia’s chief market regulator that traditional finance must engage with tokenisation.

According to one fintech sector executive, the speech “sends a strong signal to traditional finance … a wake-up call” and flagged the urgency for Australia to lift its game in digital asset frameworks.

Tokenisation seeks to reconfigure financial markets by compressing settlement times, widening investor access and creating fractionalised ownership models, according to recent analyses.

While the domestic policy stack – including regulatory guidance from ASIC, pilot programs from the Reserve Bank of Australia and government road-maps for digital-asset-platform licensing – shows movement, policy participants say the pace must accelerate to keep pace with global roll-outs.

Longo’s comments arrive amid growing global scrutiny of tokenised securities; the European Securities and Markets Authority recently cautioned that tokenised-stocks risk “investor misunderstanding” because they may lack traditional shareholder rights.

Nonetheless the broader shift is gathering momentum and market participants say those who act swiftly will shape the next generation of finance.

For Australia, the implications are two-fold: first, creating regulatory and infrastructure conditions compatible with tokenised assets; and second, ensuring domestic capital-markets players are not bypassed as international participants seek lower-cost, faster-settlement environments.

As Longo noted, the opportunity window is narrow and the competitive terrain global.

With ASIC stepping up its focus on innovation and markets policy, Longo said the regulator will engage with industry on reform pathways and act decisively where necessary to avoid leaving Australia behind in this technological shift.