Westpac Institutional Bank has embarked on an exciting journey by partnering with Chainlink and Imperium Markets to enhance the realm of digital finance through Project Acacia. This innovative initiative aims to implement blockchain-based tokenized asset settlement capabilities, marking a significant step towards modernizing Australia’s financial infrastructure.
At the core of Project Acacia is the Chainlink Runtime Environment, which will orchestrate secure Delivery vs. Payment (DvP) settlements for tokenized assets across various blockchain markets, integrating seamlessly with Australia’s existing PayTo domestic payments system. This marriage of blockchain technology with traditional payment frameworks promises a more efficient approach to transaction settlements, often fraught with delays and complexities.
Australia’s central bank has been considering the broader implications of this collaboration. They have estimated that the tokenization of assets could potentially save issuers up to AUD $12 billion annually in the Australian markets. Such savings underscore the revolutionary changes that tokenization can bring, not just in cost efficiency but also in accessibility and transparency.
Westpac Extends PayTo Infrastructure for Tokenized Asset Transactions
Westpac’s proof of concept is designed to explore whether the existing PayTo infrastructure can effectively manage the settlement and clearing of large wholesale banking payments necessary for tokenized asset transactions. Launched in 2024, PayTo operates as a digital-first alternative to traditional direct debit payments, allowing for real-time transactions with increased visibility and control for customers. This shift is particularly timely as financial transactions increasingly demand transparency and rapid processing.
Utilizing established exchange settlement accounts with the Reserve Bank of Australia (RBA), the PayTo system not only processes payments in real time but also enriches transaction details, verifying authorizations and ensuring secure storage of valuable data. Jeff Byrne, Managing Director of Global Transaction Services at Westpac Institutional Bank, elucidates this project’s significance, stating, “helping the RBA explore what digital currencies could look like in the real world” while providing customers with safer and more innovative payment options.
However, the initiative does more than just improve settlement capabilities; it extends Westpac’s PayTo framework into the realms of advanced technologies like asset tokenization. This demonstrates the bank’s commitment to unlocking new value while safeguarding customer interests. Additionally, the proof of concept serves as a testing ground for post-quantum cryptography, utilizing advanced encryption techniques to secure financial data against the potential threats posed by future quantum computing advancements.
David Walker, Westpac’s Chief Technology Officer, emphasized the project as a “real-world opportunity to learn and create something that will be significantly important in the future,” highlighting the necessity for collaborative efforts among banks, telcos, retailers, and government entities to craft the next generation of payment architectures.
To facilitate the hands-on testing required for this ambitious project, the Australian Securities and Investments Commission has provided regulatory relief. As the testing progresses, findings from Project Acacia are anticipated to be released in the first quarter of 2026, promising to shed light on the future landscape of digital finance in Australia.
Global Financial Institutions Accelerate Blockchain Infrastructure Development
In a broader context, Chainlink has positioned itself at the forefront of a potentially lucrative $260 trillion market by partnering with various major financial institutions. These collaborations aim to unlock the untapped assets market through its Cross-Chain Interoperability Protocol, which is essential for facilitating seamless interactions across different blockchain networks.
In early 2023, Chainlink collaborated with Abu Dhabi Global Market to develop nuanced blockchain standards and explore tokenization frameworks within regulated confines, further demonstrating its commitment to fostering a secure environment for financial innovation. Market analysis by RedStone revealed that the market for tokenized real-world assets surged to $24.31 billion by June 2025, showcasing a staggering growth from $8.6 billion at the beginning of the year. A significant chunk of this value is attributed to private credit, which alone represents over half of the total market share at $14 billion.
Contrastingly, Australia’s proactive approach in implementing Project Acacia stands in stark relief to the restrictive measures adopted by some of its major banks regarding cryptocurrency platforms. For instance, the National Australia Bank faced backlash after halting payments to certain crypto exchanges, citing scam-related concerns. With a strategic focus on regulated institutional applications, Project Acacia could potentially deliver AU$19 billion annually in economic benefits, as per estimates from Professor Talis Putnins from the Digital Finance Cooperative Research Centre.
Ultimately, the rigorous real-money settlement testing being conducted on third-party platforms as part of Project Acacia marks a pioneering endeavor for Australia in the digital finance sector, positioning it as a leader in exploring and implementing innovative financial solutions within a rapidly evolving landscape.
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