Key Takeaways:
- The country’s Financial Services Minister, Jane Hume, has publicly spoken in favor of cryptocurrency.
- She claims that it is not a passing ‘fad’ and is here to stay.
- She believed the technology to be similar to other previous industry disruptors like the iPhone.
- Hume’s pro-crypto speech is coming just days after a Reserve Bank of Australia (RBA) official predicted a tremendous crash in the crypto market.
Financial services minister Jane Hume has stated that cryptocurrency is not a fad and that government and industry should not be worried about the rise of decentralized finance. At an Australian Financial Review summit today, Hume said that regardless of people’s opinions on cryptocurrency, it was “not going away any time soon. So as an industry and as a government, we need to acknowledge this is not a fad. We should tread cautiously, but not fearfully.””
She advised caution in the field but cautioned against being overly fearful, as she saw the technology as similar to previous industry disruptors such as the iPhone. Her speech also emphasized that any opposition to cryptocurrency today is comparable to opposition to disruptive technologies such as the iPhone or the internet.
She stated that “”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 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.“” Hume even said, “”Decentralised finance underpinned by blockchain technology will present incredible opportunities – Australia mustn’t‘ be left behind by fear of the unknown.”
In her speech, Hume emphasized the enormous potential of decentralized finance, which is based on blockchain technology. However, she also warned that fear of new technology could cause Australia to fall behind in the crypto race and the global financial revolution.
Hume’s pro-crypto speech comes just days after a senior Reserve Bank of Australia (RBA) official predicted a massive crypto market crash. Tony Richards, the RBA’s head of payments policy, told the Australian Corporate Treasury Association that the ‘current fervor’ around cryptocurrencies might not last, predicting a market-wide crash in the range of $2.6 trillion.
He said that “”Households might be less influenced by fads and a fear of missing out and might start to pay more attention to the warnings of securities regulators and consumer protection agencies in many countries about the risks of investing in something with no issuer, no backing, and highly uncertain value.””
According to Richards, a scenario in which cryptocurrencies crash would be more likely if solid regulatory frameworks for stablecoins crypto-assets that are more stable in value and connected to an existing asset were established. According to him, issuing central bank distributed currencies as stablecoins would allow faster, safer, and more efficient transactions, potentially changing people’s perceptions of cryptocurrencies.
Richards said, “”While it is hard to point to any firmer evidence on cryptocurrency holdings by Australians, some of the estimates out there are extremely surprising and may be symptomatic of the significant amount of hype and misinformation in this area.””
Other issues raised by the crypto industry, according to Richards, include high energy consumption, tax and security concerns related to anonymity, and on- and off-ramps between crypto and the traditional financial sector. Establishing solid regulatory frameworks for stablecoins, according to Richards, could lead to a crypto market crash. Richards also stated that he did not believe the Senate report’s estimate that about 17% of Australians held crypto-assets accurately.
