Chapter 6 · Legal & regulatory considerations

Clarity is the prerequisite. Sandbox runway is what moves it forward.

Tokenisation raises issues current frameworks didn't anticipate — especially in post-trade. Acacia identified specific legal and regulatory areas needing attention, and surfaced clear feedback that time-bound regulatory relief isn't enough on its own.

Six focus areas

Where the work is.

01

Legal structure of money

  • ESAs — contractual claims, free of counterparty risk.
  • wCBDC — pilot under deed poll; production form still TBD.
  • Stablecoins — contractual redemption claims; new tokenised SVF regime incoming.
  • Deposit tokens — could mirror deposits; FCS coverage requires explicit declaration.
02

Legal structure of assets

  • Digital twin dominant; digital native needs clarity on registers + finality.
  • Digital Assets Framework Bill passed Apr 2026, commences Apr 2027 — introduces TCPs.
  • MLETR implementation by AGD in progress — would enable digitised trade records as bearer instruments.
  • Industry-standard contracts (à la ISDA Master, GMRA) could underpin cross-jurisdiction adoption.
03

Settlement finality

  • Technical finality — depends on consensus mechanism (deterministic vs probabilistic).
  • Legal finality — needs operating rules establishing record authority.
  • PSNA 'approved RTGS systems' protect against the zero-hour rule — currently RITS, Austraclear, CHESS RTGS.
  • DLT platforms would need PSNA approval for similar protection.
04

Market-infrastructure regulation

  • DLT tightly integrates trading + settlement — current licensing regimes split them.
  • Public-DLT 'no clear operator' raises perimeter questions.
  • Some use cases interposed regulated entities (Fireblocks → ABE) to preserve operator clarity.
  • Regulators open to engagement; additional ASIC guidance may follow.
05

Financial products & services

  • ASIC Info Sheet 225 (Oct 2025) clarified digital-asset financial-product treatment.
  • Incoming reforms add a 'look through' exemption for digital twins under TCPs.
  • Specific characterisation (security / derivative / MIS / non-cash payment) still matters.
06

Prudential treatment

  • Banks: awaiting clarity on Basel crypto-asset standard timing — affects capital + liquidity charges.
  • Stress-testing for DLT-specific risks (network congestion, market fragmentation).
  • Superannuation funds: valuation basis + operational risk questions for APRA.
Industry feedback

Time-bound relief isn't enough.

ASIC's project-level class relief and AUSTRAC's targeted exemptions made participation possible. But larger institutions reported that the project's timeframes weren't sufficient for internal risk + compliance reviews — some shifted from real-money pilots to PoCs mid-flight.

The clear preference: longer-term regulatory and innovation sandboxes that can host commercialisation pathways, not just experiments. International models offer templates.

Box H · International examples

What's working overseas.

Different jurisdictions have used different regulatory levers, but a few features recur: longer timeframes, broad engagement, convening of market participants, and availability of safe assets (tokenised gov bonds, central bank money) for experimentation.

MAS, Singapore

Project Guardian

Multi-asset public-private initiative launched Jun 2022. Industry-published Guardian Fixed Income Framework + Guardian Funds Framework. Cross-border policymaker coordination.

Hong Kong

HKMA Supervisory Incubator for DLT

Launched Jan 2025. A 'one-stop' supervisory platform letting banks iteratively validate risk controls in live trials. Supports Project Ensemble (tokenised deposits → wCBDC).

BoE / FCA, UK

Digital Securities Sandbox

4-gate 'glidepath' — testing → live with limits → scaling → full authorisation outside the DSS. 16 applicants through Gate 1 by report date. Will host the DIGIT (Digital Gilt) pilot.

Common features

What good 'commercialisation pathway' regimes share.

Longer timeframes for experimentation

Initiatives spanning several years — or open-ended — give larger incumbents the 'runway' their internal compliance processes need.

Regular, broad engagement

Ongoing two-way learning between regulated entities and supervisors. Acacia's IAG was praised as a model for this.

Convening of market participants

Multi-party coordination on lifecycle issues — issuance, servicing, trading, settlement — where interdependencies are strong.

Availability of safe assets

Tokenised government bonds and central bank money provide credible anchors for experimentation in systemic markets.