Cryptocurrency is not a fad and the federal government can’t be fearful of new innovations in the space, according to Digital Economy Minister Jane Hume.
In a speech to the Australian Financial Review’s Super & Wealth Summit in Sydney, Senator Hume backed the growth potential of decentralised finance, just days after the Reserve Bank of Australia had questioned the validity of it and warned against “fads”.
Senator Hume slammed the notion that cryptocurrencies are a “fad”, and said Australia should “forge our own trail” in the sector.
“I commend industry for embracing innovation and developments in this space, particularly around blockchain. As an industry, and as a government, we need to acknowledge this is not a fad. We should tread cautiously, but not fearfully,” Senator Hume said in the speech.
“If the last 20 or 30 years have taught us anything, it’s that all innovation begins as disruption and ends as a household name. Decentralised finance underpinned by blockchain technology will present incredible opportunities – Australia mustn’t be left behind by fear of the unknown.”
Last week, Reserve Bank of Australia head of payments policy Tony Richards warned that investors may become “less influenced by fads”, and questions the validity and growth of cryptocurrencies.
“Some surveys have claimed that around 20 per cent of the Australian population hold cryptocurrencies, and one claimed that Dogecoin alone was held by 5 per cent of Australians. I must say that I find these statistics somewhat implausible,” Mr Richards said.
But Senator Hume said the technology presents “huge opportunities”, and Australia shouldn’t be left behind.
“Don’t be the person who thought the iPhone would never take off because people would prefer to have their music and telephone on separate devices. Don’t be the person who was still doing their financial models by hand in 2001, rather than using Excel,” she said.
“Don’t be the person in 1995 who said the internet was just a place for geeks and criminals and would never become mainstream. And don’t be the person who argued that email was a passing fad.
“The Morrison government wants our economy to flourish and continue to match pace with our global counterparts. Embracing innovation, and encouraging personal responsibility through engagement and informed consent will drive our economy forward, cementing Australia as a frontrunner for innovation and economic progress.”
The Minister’s ringing endorsement of crypto comes just weeks after a Liberal-led committee handed down a report detailing a roadmap to licence and regulate cryptocurrencies.
Liberal Senator Andrew Bragg chaired the committee, which recommended that crypto exchanges and assets be licenced and regulated by Treasury, and for a new system to be introduced in corporate law, known as a decentralised autonomous organisation.
“You don’t want to use old hooks for new ideas, I don’t want to hang the new coat of cryptocurrency regime on a 20-year-old Corporations Act. I want it to be in the Corporations Act but I don’t want to use what’s already there,” Senator Bragg told InnovationAus last month.
“We want to have regulation and it should be in the Treasury portfolio, but we should look to find new regimes that are fit for purpose. We should be searching for new solutions within the Treasury portfolio to promote innovation – forcing new ideas onto hold hooks risks losing innovation.”
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