Digital Settlement in Action: Cuscal’s Insights from Project Acacia

Digital settlement is often discussed in broad, abstract terms. As a future state enabled by new forms of money and new technology. What is less frequently explored is what becomes visible when those ideas are tested inside real, regulated financial markets, alongside existing infrastructure, risk frameworks, and operating realities.

That was the purpose of Project Acacia, a research and pilot initiative led by the Reserve Bank of Australia and the Digital Finance Cooperative Research Centre.

Cuscal participated in Project Acacia across multiple use cases, contributing not only insight informed by our role across payments and market infrastructure, but also practical capability through the use of our existing payments rails. Being directly involved in how funds moved, and where friction emerged, sharpened our understanding of where digital settlement delivers the most value in practice. What stood out was not digital settlement as a replacement for existing systems, but as an evolution that works with them.

This article reflects on those experiences through three use cases Cuscal was directly involved in, offering a grounded view of how digital settlement begins to take shape when tested inside real markets.

What is Project Acacia?

Project Acacia was designed to explore how digital forms of value, including tokenised assets, stablecoins and wholesale central bank digital currency (CBDC), could be used to support settlement in wholesale markets.

Rather than pursuing a single model, the project brought together 24 innovative use cases from a diverse range of organisations, spanning major banks, superannuation funds, asset managers, payment providers and fintech’s. By combining existing banking and payments infrastructure with stablecoin technology and live market participants, the pilots created a realistic setting to test how digital settlement works in practice.

What participation revealed in practice

Participating in Project Acacia provided Cuscal with the opportunity to observe digital settlement in action across a range of real-world scenarios. The three use cases that follow reflect different aspects of how digital settlement interacts with existing market structures, infrastructure, and participant needs.

Across each, Cuscal provided connectivity via our payments rails and acted as both stablecoin issuer and distributor of wholesale central bank digital currency, enabled by our status as an authorised deposit-taking institution with an RBA Exchange Settlement Account.

Use case one: Compressing settlement in wholesale markets with Imperium Markets

Imperium Markets led a use case focused on one of the most entrenched features of wholesale markets: settlement delays that are widely accepted as normal, despite the cost and risk they introduce.

What was tested, and why it mattered
In many wholesale transactions, agreements are reached instantly, but settlement still occurs one or two days later. That timing gap has practical consequences. The financial impact created by the timing gap between agreement and settlement is borne either by the investor, when issuance is delayed until the funds are received, or by the issuer, who absorbs the administrative costs associated with delayed or corrected provisioning as part of normal business operations. The same tension appears again at maturity when proceeds cannot be reinvested immediately because settlement lags the financial event.

This use case tested whether digital settlement could meaningfully reduce that gap. Transactions executed on Imperium’s ASIC-licensed marketplace were settled using a stablecoin backed by wholesale central bank digital currency, allowing the asset and the payment to move together. The same mechanism was also used for coupon and maturity payments, extending digital settlement across the full lifecycle of the asset.

What we learnt by being involved
What stood out for us was how quickly long-accepted frictions became visible once settlement moved closer to real time. Settlement times were reduced from days to under 30 minutes, without changing the underlying economic transaction.

More importantly, the use case showed that compressing settlement windows does not require reinventing markets. It requires rethinking how and when value moves. For wholesale markets, that shift has direct implications for liquidity, reinvestment, and how settlement risk is shared.

Use case two: Enabling two-way exchange between bank accounts and tokenised value with Australian Payments Plus

Australian Payments Plus (AP+) led a use case exploring how Australia’s existing payments infrastructure could support a seamless two-way exchange between money held in bank accounts and tokenised forms of value.

What was tested, and why it mattered
While tokenised assets and digital currencies are gaining attention, moving money between bank accounts and tokenised environments often involves additional steps or bespoke processes. In practice, that effort matters. If converting money into tokenised form feels cumbersome, it becomes a deterrent to holding or using tokenised value at all.

This desktop proof-of-concept explored how the New Payments Platform (NPP) could function as an on and off ramp, enabling conversion between bank account money and tokenised value using existing rails. The working concept, referred to as an NPP Coin Service, examined what technical adaptations, application programming interfaces and settlement enhancements would be required, alongside risks related to financial stability, privacy, security, and regulatory obligations.

What we learnt by being involved
For us, this use case reinforced that digital settlement only delivers value if it fits naturally into how participants already operate. Reducing the effort required to move between bank accounts and tokenised value is not a nice-to-have. It is a prerequisite for adoption.

Exploring the NPP as an on and off ramp highlighted the potential of existing payments infrastructure to support digital settlement, provided these connection points are deliberately designed rather than treated as an afterthought.

Use case three: Enabling interoperability between tokenised currencies with Australian Payments Plus

AP+ also led a use case focused on a growing challenge in digital settlement markets: how transactions work when multiple tokenised currencies coexist.

What was tested, and why it mattered
As more institutions issue or prefer different forms of tokenised value, fragmentation becomes inevitable. A participant may hold one tokenised currency, only to find it is not accepted by the party they want to transact with. Over time, this uncertainty becomes a barrier to adoption.

This use case explored whether a neutral, scheme-based token interchange could reduce that friction. The concept allowed a payment to be made in one tokenised currency and received in another, without requiring either party to hold multiple instruments. Wholesale central bank digital currency was used as a neutral interchange asset to support coordinated exchange between privately issued tokens.

What we learnt by being involved
For us, this use case reinforced that early-stage markets rarely standardise quickly. Expecting participants to converge on a single tokenised currency too early risks slowing adoption rather than accelerating it.
What became clear is that interoperability can matter more than uniformity. A neutral interchange layer has the potential to reduce fragmentation, lower barriers to participation and allow different tokenised currencies to coexist without limiting who can transact with whom.

What participation revealed

One of the most valuable aspects of participating in Project Acacia was the opportunity to step back from familiar systems and see them through a different lens. Testing digital settlement in a live, regulated environment prompted deeper questions about how existing processes evolved, why certain frictions are accepted as normal, and where alternative approaches might better serve today’s markets.

Taken together, the use cases show where digital settlement aligns most closely with how markets actually operate today. Not as a single solution, but as a targeted evolution that addresses specific points of friction where timing, risk and complexity already impose real cost.

From our participation in Project Acacia, it became clear that progress will be shaped less by technology alone, and more by how thoughtfully new capabilities are integrated into the financial system as it exists today.

About Cuscal

Cuscal has played a foundational role in shaping the nation’s payments ecosystem for over 60 years as Australia’s largest independent provider of end-to-end payments and regulated data solutions.

We combine the licensing, infrastructure, and regulatory oversight of an Authorised Deposit-taking Institution (ADI) with the innovation, agility and client focus of a fintech. From real-time payments, card issuing, and acquiring, to fraud monitoring, digital wallets, regulated data services and more. Our clients trust us to simplify complexity, reduce risk, and help them compete.

Moving Payments Forward. Together

Authored by: Bronwyn Yam, Chief Product Officer Cuscal

References
Treasury Today, ‘Cuscal IPO raises AU$337m on ASX’, Treasury Today website, article, Feb 2026, accessed 5 February 2026, <https://treasurytoday.com/asa-asia-winners-2025/cuscal-ipo-raises-au337m-on-asx/>

Digital Finance Cooperative Research Centre, ‘Project Acacia’, Digital Finance Cooperative Research Centre website, project overview, accessed 30 January 2026, <https://dfcrc.com.au/projects-cbdc-acacia/>

Digital Finance Cooperative Research Centre, ‘Project Acacia: Summary of use cases’, Digital Finance Cooperative Research Centre website, project summary report, August 2025, accessed 30 January 2026, <https://dfcrc.com.au/wp-content/uploads/2025/08/Project-Acacia-summary-of-use-cases.pdf>

Reserve Bank of Australia, ‘Project Acacia: Exploring the role of digital money in wholesale markets’, Reserve Bank of Australia website, media release, 18 June 2025, accessed 30 January 2026, <https://www.rba.gov.au/media-releases/2025/mr-25-18.html>

Reserve Bank of Australia, ‘Reserve Bank and Digital Finance CRC to explore central bank digital currency’, Reserve Bank of Australia website, media release, 15 November 2024, accessed 30 January 2026, <https://www.rba.gov.au/media-releases/2024/mr-24-25.html>

Important Information: Information in this article is current as at 16 February 2026 and is subject to change. This article represents personal opinions and views only. This article is provided for general information purposes only and does not have regard to the situation or needs of any reader and must not be relied upon as advice. Before acting on this information, consider its appropriateness to your business. This article is not to be distributed to any other party without Cuscal’s prior written consent. Cuscal Limited ABN 95 087 822 455.