2021 was a billboard year for crypto in Australia and around the world. Discussions about DeFi, DAOs and blockchain technologies have picked up pace. Bitcoin reached new all-time highs and was adopted as the official currency of El Salvador. Coinbase listed on the Nasdaq and there has increasingly been mainstream coverage of innovations like NFTs and CBDCs. As the year draws to a close, crypto is now further entrenched in the present-day culture and widely recognised as a growing part of our common global future.
In the Australian market, Commonwealth Bank’s announcement of a pilot program to allow customers to buy, sell and hold crypto assets in-app represents a key milestone in the journey to provide crypto exposure to a hungry segment of retail investors. Indeed, the race is on to bring a spot-price Bitcoin ETF to market to capture those investors who have no appetite for self-custody or navigating the sometimes complex on-ramps and off-ramps that come with the original cryptocurrency.
A recent survey from comparison site Finder revealed that almost 18% of Australians own cryptocurrency — the third-highest ownership rate in the world and well above the global average of 11.4%. Another study, commissioned by Monochrome Asset Management in Brisbane, found that 77% of financial advisors in Australia had had Bitcoin come up in discussions with clients in the last year.
In the nation’s capital, the Federal Government has finally begun to grapple with cryptocurrency and the future of finance. Despite officials from the Reserve Bank of Australia and the Australian Securities and Investments Commission warning of crypto bubbles, routine fraud and meme-coin fads, Financial Services Minister Jane Hume has talked up the disruption and spruiked the opportunity. Her message: let’s get involved.
While the Farrell Payments System Review was a significant moment this year, momentum around crypto policy has picked up thanks in part to the work of the Senate Select Committee on Australia as a Technology and Financial Centre. It’s rare that a parliamentary enquiry has such significant policy influence, but this Committee — led by the energetic Senator Andrew Bragg — has had impeccable timing. Last week Treasurer Josh Frydenberg announced wholesale reforms to overhaul the Australian payments system, including licensing and custody regimes for crypto assets and a commitment to consult on a CBDC (a.k.a., a digital Aussie dollar).
Such developments are promising. They are a sign the government recognises the necessity of regulatory clarity if Australia’s digital economy is to grow. But these are early days — the details are still to be worked out and delivered. And despite the Morrison Government’s forward-leaning rhetoric and policy platforms, there remain plenty of nay-sayers and sceptics, as well as those who still have legitimate questions about crypto assets and those who are yet to develop their understanding.
Thanks in large part to Bitcoin’s incredible brand and track record, crypto is coming into the mainstream — and the race is on to facilitate the journey for Australians. Confidence and trust still need to be built, and concerns need to be assuaged. It is generally recognised that most investors, retail or institutional, will not spend the time to read Satoshi’s Bitcoin White Paper. Despite that, there remains a need to ensure the public is educated on the technology and has the tools to grasp the opportunity. Similarly, as the government embarks on a program of reform, established players in the digital asset sector will increasingly need to engage with officials, standard-setters and parliamentarians to promote business interests and protect the long-term viability of the crypto industry.
In such a competitive and emergent space, having a trusted brand, an authentic voice and a consistent media and policy strategy will be paramount.
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