Westpac Partners with Chainlink for Blockchain Asset Settlement Project Acacia

Westpac Institutional Bank has partnered with Chainlink and Imperium Markets to implement blockchain-based tokenized asset settlement capabilities through Project Acacia. This initiative is a joint effort between the Reserve Bank of Australia (RBA) and the Digital Finance CRC (DFCRC). The Chainlink Runtime Environment will facilitate secure Delivery vs. Payment (DvP) settlement of tokenized assets across blockchain markets and Australia’s existing PayTo domestic payments system.

The RBA has estimated that tokenization could save asset issuers up to AUD $12 billion annually in Australian markets. This project builds on the RBA’s broader six-month pilot program, which involved 24 industry participants conducting 19 real-money transactions and five proof-of-concept simulations across multiple asset classes.

Westpac’s proof of concept aims to demonstrate that the existing PayTo infrastructure can handle the settlement and clearing of large wholesale banking payments required for tokenized asset transactions. PayTo, launched by Westpac in 2024, is a digital-first alternative to direct debit payments that enables real-time transactions with enhanced visibility and control for customers. The system settles transactions using banks’ existing exchange settlement accounts with the RBA, offering rich transaction data, verified authorization, and secure storage capabilities.

Jeff Byrne, Managing Director of Global Transaction Services at Westpac Institutional Bank, highlighted the bank’s role in exploring digital currencies and providing new payment options safely and securely. The project also extends Westpac’s PayTo capabilities to emerging technologies such as asset tokenization, demonstrating ways to unlock new value while protecting customers. Additionally, the proof of concept provides an opportunity to test post-quantum cryptography in financial systems, using advanced encryption algorithms designed to resist potential future quantum computer attacks.

David Walker, Westpac’s Chief Technology Officer, described the initiative as a real-world opportunity to learn and create something important for the future. Westpac maintains a long-term equity investment in Australian cybersecurity company QuintessenceLabs, which has developed quantum-enhanced cryptography solutions already deployed in defense and large organization applications. Walker emphasized the need for strategic involvement from all stakeholders, including banks, telcos, retailers, and governments, to create the next generation of payments architecture.

The Australian Securities and Investments Commission has granted regulatory relief to facilitate the testing, with project findings expected in the first quarter of 2026. Chainlink has positioned itself at the center of a potential $260 trillion market opportunity through partnerships with major financial institutions to unlock the untokenized assets market via its Cross-Chain Interoperability Protocol. Earlier this year, Chainlink partnered with Abu Dhabi Global Market to develop blockchain standards and explore tokenization frameworks within regulated environments.

Australia’s approach to tokenization contrasts with the restrictive stances some of its major banks have taken toward crypto platforms. Project Acacia’s focus on regulated institutional applications could generate AU$19 billion annually in economic gains, according to Professor Talis Putnins from the Digital Finance Cooperative Research Centre. Organizers have described Australia’s real-money settlement testing on third-party platforms as a world-first for the country in the digital finance industry.