Tokenised property in Australia: when a token is a financial product

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A token that stands for a share of a building raises one legal question before any other in Australia: is the thing being sold a financial product? The answer decides whether the business behind it needs an Australian financial services licence, what it must hand to a retail client before taking money, and which regulator's standards apply. Federal law answers the question by looking at what the arrangement does, never at the technology that records it.

This guide sets out how the Corporations Act 2001 approaches the question, what Parliament added with the Corporations Amendment (Digital Assets Framework) Act 2026, when those additions start, what the Reserve Bank of Australia's Project Acacia tested, and which points the published sources leave open. It describes federal financial services law only. The land title, conveyancing and duty rules of each state and territory are a separate subject and are not covered here.

Corporations Amendment (Digital Assets Framework) Act 2026, section 2 and new section 911A(2)(ja) of the Corporations Act 2001.

The law looks at function, not at the token

Treasury's token mapping consultation paper, dated February 2023, describes the starting point. Australia, it says, uses a broad functional definition of a financial product. The definition captures any "facility" through which a person does one of three things: makes a financial investment, manages financial risk, or makes non-cash payments.

The word facility is wide. According to the paper, it covers intangible property and any term of an arrangement, whether or not that term is legally enforceable. The paper reduces the assessment to two steps: first, whether the token system is a facility; second, whether one of the three general financial functions is performed through it.

One consequence follows for anyone looking at a property token: tokens are not set apart. The paper states that crypto assets are not carved out of the framework: a product is a financial product if it falls inside the functional definition or meets one of the specific definitions in the Act, whatever technology it runs on, and assessing a crypto product "is no different than the process for any other product".

The paper also draws a distinction that matters for real estate. In an intermediated token system, functions are performed by intermediaries or agents under promises or arrangements. In a public token system, the functions are ensured by the network itself. A token linked to a building is, by nature, tied to an asset that exists off the ledger, so somebody has to hold that asset and somebody has to honour the link. The paper describes such "wrapped" real-world assets as tokens backed by existing items, goods, products or assets.

Real estate on its own is not a financial product

The same Treasury paper gives the baseline for land. Citing section 763B of the Corporations Act, it says that gold and real estate are not financial products, because no return is generated by another person's use of the purchase money. Buying a property outright is not, in that sense, a financial investment under the Act.

That baseline explains why the structure matters more than the label. A token described as a fraction of a house may, depending on the documents, give its holder a direct right to an asset, a claim on an operator, a share of pooled rent collected by someone else, or exposure to a price. Each of those is assessed separately against the functional definition and the specific definitions. The Treasury paper does not work through a real estate example: land and fractional ownership are not among the cases it discusses, and no other source used here does so either. What the sources give is the method, and the method depends on the facts of each arrangement.

Managed investment schemes, securities and derivatives

Three existing categories recur in the official material on tokens.

The first is the managed investment scheme, the Corporations Act's category for collective investment. Section 601ED is headed "When a managed investment scheme must be registered", and section 601FA requires the responsible entity of a registered scheme "to be public company and hold Australian financial services licence", in the words of its heading. The token mapping paper mentions the category in passing, noting that a staking service "could be structured" as a managed investment scheme.

The second is securities. The paper notes that lending and borrowing arrangements could be structured so that they are debentures or other securities. The third is derivatives: the paper points to licensed crypto token derivatives, such as options, futures and contracts for difference, as examples that already exist, and adds that the Act's definition of a derivative may pose challenges for self-serve smart contracts.

Where a token is, or is backed by, an existing financial product, the consequences are the ordinary ones. The paper says that crypto assets backed by existing financial products have clear financial functions, and that a provider of services over such assets would likely be providing a financial service and need the relevant Australian financial services licence. The services it lists include advice, dealing, market-making and custodial or depository services.

There is evidence that this route is in use. In a speech on 25 March 2026, Brad Jones, the Reserve Bank's Assistant Governor (Financial System), said the Australian Securities and Investments Commission (ASIC) had licensed one entity to trade and settle shares in private companies and units in managed investment schemes. He added that ASIC was analysing regulatory and legal barriers to asset tokenisation.

The 2026 Act creates two new financial products

The Bill was introduced on 26 November 2025. Ministerial releases on the framework described digital assets as including property represented as digital tokens.

The Corporations Amendment (Digital Assets Framework) Act 2026, Act No. 38 of 2026, was assented to on 8 April 2026, according to the Federal Register of Legislation. It adds two items to the list of things that are financial products in section 764A of the Corporations Act: a digital asset platform, in new paragraph (la), and a tokenised custody platform, in new paragraph (lb).

The Act starts from a definition of the token itself. Under new section 761GB, a digital token is "an electronic record that one or more persons are capable of factually controlling". A person has that capability when they can transfer the record, exclude others from doing so, and demonstrate both. Regulations may add or exclude kinds of record.

The two are mutually exclusive: section 761GC(4) provides that a tokenised custody platform is not a digital asset platform. Ministerial material issued at the draft stage said the framework does not add burdens on token issuers or on businesses that use digital assets for non-financial purposes.

The two new paragraphs of section 764A carry a qualification. Each makes the platform a financial product "unless the platform is a managed investment scheme". A platform that is a scheme is therefore dealt with under the existing scheme category and not under the new one.

The Act also amends the section 9 definition of a managed investment scheme. New paragraphs (mc) and (md) deal with digital asset platforms and tokenised custody platforms that meet stated conditions: the clients hold rights of redemption or delivery, the operator acts only on client instructions, and the operator cannot materially negotiate the clients' rights. For a tokenised custody platform, paragraph (md) further requires that all underlying assets be of the same class and that the divisibility of the token match that of the asset. Two more paragraphs, (me) and (mf), deal with custodial staking arrangements and with public digital token infrastructure. Whether a platform meeting the conditions is brought within the scheme definition or taken out of it is listed among the open points below.

Read together, these provisions tie the classification to what the operator does: whether it simply holds an asset to the order of the token holder, on terms it cannot bargain over, or does something more. Where the scheme category applies, so do the Act's registration and responsible entity provisions for schemes. Where a given property arrangement falls depends on its own terms, and on the full text of the definition as it stands after commencement.

A separate provision, new section 765E, addresses wrapped tokens. A wrapped token is one that confers a right to redeem, or direct delivery of, a related asset, including an underlying asset of a tokenised custody platform. That right is disregarded when deciding whether the token itself is a financial product. The disregard falls away if the related asset is a financial product and the holder's rights differ from those of holding it directly, or in circumstances set by regulation.

What the custody model would ask of a property token

The definition of a tokenised custody platform refers to "one or more assets other than money". The Act does not mention real property, land or interests in land anywhere in its text, so the definition neither names real estate nor excludes it by name.

What the definition does fix is the shape of the arrangement. The operator identifies the asset. It creates a single digital token for each underlying asset. Possession of that token carries a right to redeem the asset or to direct its delivery. And the operator holds the asset for the possessor of the token as trustee, as bailee, or under an obligation to act on the holder's instructions.

Each element raises a question when the asset is land, and the Act does not answer them for that case. How a right to redeem or direct delivery operates for a registered title, how the one-token-per-asset rule sits with a building divided among a large number of holders, and how the divisibility condition in paragraph (md) applies to an interest in land are matters the text leaves to its general words. They are listed among the open points at the end of this guide.

Licence, standards and platform rules

The issuer of either platform needs an Australian financial services licence under new section 912BA. The Act adds matching financial services to the Corporations Act: dealing in a digital asset platform or possessing digital tokens under one, and dealing in a tokenised custody platform or holding assets under one. Section 766K confines these services to constitutionally-covered corporations, a term that section 9 defines by reference to paragraph 51(xx) of the Constitution.

A licensed issuer then carries three platform-specific duties:

1. Under section 912BB, to comply with the asset-holding standards and the transactional and settlement standards. ASIC makes both by legislative instrument, under sections 912BE and 912BF.
2. Under section 912BC, to maintain platform rules that meet section 912BG. The issuer writes these rules itself, or they sit in its constitution.
3. Under section 912BD, to comply with any prohibition the Minister makes by legislative instrument under section 912BH.

Section 912BG lists what the platform rules must contain. They include transparent and non-discriminatory eligibility criteria; the clients' ongoing obligations; the settlement method; who bears counterparty and operational risk; how ownership is recorded; how changes are communicated; which types of asset are available and how that is decided; and the arrangements for depositing, redeeming and directing delivery of assets in kind.

The Act labels these duties, among others, as civil penalty provisions under section 1317E, and does not state dollar amounts in its own text. The only figures in the sources come from the draft stage: the Assistant Treasurer's release of 25 September 2025 said breaches could attract penalties of up to the greater of A$16.5 million, three times the benefit obtained, or 10 per cent of annual turnover.

Platforms that are also financial markets or clearing and settlement facilities are handled separately. To the extent a platform is one of those, it is not a financial product under the new paragraphs, and the Minister may extend or exempt market and clearing facility status by legislative instrument.

A platform guide in place of a product disclosure statement

Retail disclosure for the new products follows its own track. New section 1010B(3) removes the product disclosure statement requirement of Part 7.9 for these platforms. In its place, section 1020AN requires a document the Act calls a DAP/TCP Guide to be given before a platform is issued to a retail client.

Section 1020AO sets the content. That includes the nature and risks of the platform; who the licensee and any custodians are and what each is responsible for; all charges, including any right to recover expenses from client assets; how holding through the platform differs from holding the asset directly, with cooling-off, voting and withdrawal rights named; how to complain; and how assets are selected. The guide must also carry fee examples and statements that total fees include platform costs and that optional conduct incurs extra fees.

Two further duties sit beside the guide. Under section 1020AP, the licensee must have a voting policy covering voting and governance rights attached to underlying assets before issuing to a retail client, and the guide must say the policy is available free on request. Under section 1020AR, a client who asks must be given copies of legally required communications the licensee receives about their assets, as soon as practicable.

The small platform exemption and a worked example

New section 911A(2)(ja) exempts the issue of a platform from the licence requirement where four conditions are all met. The operator's closely-related group holds no financial products under its platforms. The total transaction value through all its platforms over the last 12 months does not exceed A$10 million. For each client, the total entry value of underlying assets does not exceed A$5,000. And the operator has lodged a notice with ASIC in the prescribed form.

Entry value is defined in section 911A(6) as the market value of a digital token when it begins to be an underlying asset of a platform. Regulations may raise both amounts under section 911A(4B). Ministerial material on the framework said the thresholds follow the approach used for non-cash payment facilities.

A worked example, with invented figures, shows how the conditions interact. Assume a platform with 300 clients, each of whom has brought in tokens with an entry value of A$4,000. The total is 300 times A$4,000, or A$1.2 million. Assume also that A$8 million of transactions passed through the platform in the last 12 months. Every client is under A$5,000 and the platform is under A$10 million, so both money conditions are met. If one client's entry value were A$6,000, the per-client condition would fail for the platform even though the 12-month total is unchanged. The example is illustrative only, and the two non-monetary conditions still have to be satisfied.

From statement to start date

Section 2 of the Act sets commencement for the day after the end of 12 months from Royal Assent, and its table gives the date as 8 April 2027. At the date of this guide the new platform provisions are therefore enacted but not yet operating. Treasury's consultation page records that submissions on the draft were published on 2 February 2026.

The transitional rules are in new Part 10.83. Section 1730 defines a transition period of six months starting on commencement. During it, section 1732 holds the new rules back for a person who does not yet have a licence with the right authorisations, and lets that person apply to ASIC for a licence or a variation. If an application is made within the period, the new rules do not apply to that person until the day after ASIC decides it. If none is made, they apply as soon as the period ends. Counting six months from 8 April 2027 puts that point in early October 2027.

What Project Acacia tested

Project Acacia was the research track running beside the legislation. The Reserve Bank and the Digital Finance Cooperative Research Centre (DFCRC) led it, with support from ASIC, the Australian Prudential Regulation Authority and Treasury. Its subject was wholesale markets: how tokenised money and new settlement infrastructure could support trading in tokenised assets between institutions.

On 10 July 2025 the Reserve Bank announced 24 conditionally selected use cases: 19 pilots with real money and real assets, and five proofs of concept with simulated transactions. ASIC gave participants regulatory relief through an instrument on the Federal Register of Legislation. When the findings were released on 18 May 2026, the Bank said participants had developed and tested 20 use cases. The settlement assets were exchange settlement account balances at the Reserve Bank, a pilot wholesale central bank digital currency, tokenised bank deposits and stablecoins.

Real estate was not among the assets. The July 2025 release listed fixed income, private markets, trade receivables and carbon credits. Mr Jones's March 2026 speech named government and corporate bonds, repos, term deposits, certificates of deposit, annuities, asset-backed securities, carbon credits, private credit funds, trade payables, investment funds and mining royalties.

The estimates of benefit moved between the two releases. The DFCRC figure quoted in July 2025 was A$19 billion a year; the figure quoted in May 2026 was A$24 billion in annual economic gains. Both are research estimates attributed to the DFCRC.

The speech also named the obstacles: the enforceability of on-chain records and settlement finality, uncertainty over tokenised claims and smart contracts, how financial product designations apply, and how digital market infrastructure fits existing licensing. The follow-up programme in the May 2026 release includes closer cooperation between industry and regulators, a possible new regulatory sandbox for digital financial market infrastructure, consideration of tokenised government bonds, and consultation on the Reserve Bank's settlement infrastructure. No dates were attached.

A property token is classified by what its holder is promised and by who holds the asset. The ledger it is recorded on does not change that test.

What is still open

Several points cannot be settled from the published sources at 10 October 2026.

• The standards. The asset-holding standards and the transactional and settlement standards are for ASIC to make by legislative instrument. Their content is not covered here.
• The regulations. The Act leaves a long list to regulations: which records count as digital tokens, when a person possesses one, what else a platform guide must say, and whether the exemption amounts rise.
• Land as an underlying asset. The Act speaks of assets other than money and never mentions land. How redemption, delivery and the one-token-per-asset rule apply to an interest in real estate is not addressed in its text, and no Treasury or Reserve Bank source used here works through a property example.
• The scheme definition. The elements of the section 9 definition of a managed investment scheme, the registration thresholds of section 601ED, and whether new paragraphs (mc) and (md) place qualifying platforms inside or outside that definition are not settled by the sources used.
• Transaction value. The A$10 million condition refers to the total value of transactions over 12 months, and the Act as made does not define how that value is measured.
• Penalty amounts. The figures quoted come from a September 2025 ministerial release about the draft, not from the Act as made.
• The legal status of on-chain records. The Reserve Bank's own speech lists enforceability and settlement finality as unresolved challenges.
• Sandbox arrangements. Work on a new sandbox is to begin after the Government's review of the Enhanced Regulatory Sandbox, according to the same speech, with no date given.

How any one arrangement is classified depends on its documents and on the law as it stands when the arrangement is offered.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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