How ABE’s CBDC Pilot Success Could Reshape Australia’s Bond Market
Australian Bond Exchange Holdings (ABE) has successfully completed live testing in the Reserve Bank of Australia's CBDC pilot, expanded its product offerings, and reported improved cash flow in Q2 FY26.
- Successful live use-case testing in RBA-led Project Acacia CBDC pilot
- Expansion of approved product list with Zagga corporate note participation
- Net operating cash outflow improved to $0.4 million from $0.7 million
- Ongoing cost reduction initiatives and subsidiary restructuring
- Shareholder approval secured for up to 25% additional shares and $10 million convertible notes
Strategic Milestone in CBDC Infrastructure
Australian Bond Exchange Holdings Limited (ASX, ABE) has marked a significant step forward in its strategic evolution by successfully completing live use-case testing as part of the Reserve Bank of Australia's Project Acacia. This pilot explores the use of central bank digital currency (CBDC) in wholesale financial markets, positioning ABE at the forefront of integrating regulated capital markets with tokenised assets and CBDC infrastructure. The company’s proprietary trading and settlement platform demonstrated real-time, atomic settlement of tokenised fixed income instruments using CBDC, promising to reduce counterparty risk, settlement delays, and capital inefficiencies that have long challenged bond markets.
Product Expansion and Market Access
During the quarter, ABE expanded its product offering by adding a new security to its approved list and participating in the senior secured medium-term notes issued by Zagga Investments 2 Pty Ltd. The company secured $3.5 million in oversubscribed corporate notes for private investors, reflecting strong demand for disciplined commercial real estate credit investments. This diversification aligns with ABE’s mission to democratise access to fixed income markets for retail investors, wealth managers, and institutions alike.
Financial Performance and Cost Management
ABE reported a net operating cash outflow of $0.4 million for Q2 FY26, an improvement from $0.7 million in the previous quarter. Institutional trading continues to contribute positively to revenue, although private client volumes saw a decline this period. The company is actively pursuing revenue diversification and stabilisation strategies to further reduce net cash outflows. Cost reduction efforts, including restructuring of subsidiary entities, are underway and expected to yield additional savings in future periods without impacting revenue streams.
Capital Raising and Future Outlook
At its November 2025 AGM, ABE secured shareholder approval to issue up to 25% additional shares and raise up to $10 million through convertible notes. These measures provide the company with flexible options to strengthen its balance sheet and fund ongoing growth initiatives. The company remains confident in its ability to continue operations and meet strategic objectives, supported by its technology roadmap focused on delivering near real-time market access and settlement for fixed income products.
Technology and Innovation Driving Market Transformation
ABE’s continuous improvements to its Institutional Fixed Income Order Management System have enhanced reliability, execution accuracy, and operational resilience, supporting approximately $1 billion in monthly order volume. The company’s embedded relationship with institutional traders ensures rapid translation of market needs into functional upgrades. Participation in Project Acacia validates ABE’s vision of a fully digital, atomic settlement environment that could revolutionise bond, credit, and structured product markets by enabling instant settlement, removing intermediaries, lowering capital requirements, and increasing liquidity.
Bottom Line?
ABE’s progress in CBDC integration and product expansion sets the stage for a transformative role in Australia’s fixed income markets, but execution of cost savings and capital raises will be critical to watch.
Questions in the middle?
- How soon will ABE’s cost reduction initiatives translate into improved profitability?
- What is the timeline for Project Acacia moving from pilot to production, and ABE’s role therein?
- How will declining private client volumes impact ABE’s revenue diversification strategy?
