Cryptocurrency is likely to be an electoral issue for millennials, according to a risk and compliance expert.
TCM Capital’s Fred Pucci says some Australians rely on the crypto market to help them buy a home or get ahead, but without any guarantees.
“Some millennials take it to the extreme and bet all the bets,” Pucci said.
“For the Liberals, having a policy that is going to help this market grow and be supported with a greater Australian presence, and more Australian protections for investors, is going to be an attractive thing.”
But he says Treasurer Josh Frydenberg’s regulatory plans are creating a “strange state of limbo” for crypto investors.
The overhaul includes a licensing regime for crypto exchanges and asset custody rules, and relies heavily on recommendations from a Senate inquiry chaired by fintech enthusiast Andrew Bragg.
“If you look at the fine print of Treasurer Frydenberg’s document, the timeline for major parts of this will not be met, assuming they win the election and Parliament passes the legislation, before mid to late 2022.” Mr. Pucci said. .
Chloe White, a former federal insider who has guided policy thinking on blockchain and cryptoassets, is now the CEO of Genesis Block.
âLike the rest of the digital asset industry, we are very happy to see the government taking the industry seriously,â she said.
âThe main source of uncertainty is not the policy that was announced, it is in fact the upcoming elections.
“The Senate inquiry was a bipartisan activity, and it would be great to see the opposition engage with the report’s recommendations to provide certainty the industry needs to make decisions about investing and hiring. over the next year. “
The Labor Party declined to provide an update on the policy.
âOn the tech side, we’re very excited for the next 12 months,â said Ms. White.
“There are opportunities ranging from renewable Bitcoin farms to fintech and everything in between.”
Mr Pucci agrees it would be a missed opportunity if Labor did not engage, the silence worrying Australians involved in the market.
He says Senator Bragg has been very active during the 2021 investigation to understand how infrastructure works – including blockchain technology, exchanges and custodians.
“It encourages them to see that the government is supporting this tech industry,” Pucci said.
Ms White said the industry would like to see a policy introduced quickly, but getting it right was more important.
“A hasty and ill-conceived policy can backfire on us, as we have seen in the case of New York BitLicense,” she explains.
New York’s strict regime imposed business limits on state residents and required expensive capital and licenses that most start-ups couldn’t afford.
âThere’s another thing we expect to see next year and that is more big name investors like Carnegie choosing to move jobs and businesses to crypto-friendly jurisdictions,â he said. she declared.
Rival areas are already attracting Australian talent and transactions, including the Independent Reserve Exchange which has been developed here over the past decade and authorized this year by the Monetary Authority of Singapore.
The city-state has created a regulatory sandbox in which more than 200 start-ups can play while authorities keep a close watch.
âThey only gave out two or three actual licenses,â Pucci said.
“They monitor very carefully, but they only have one eye under this exemption regime.”
“You are on probation, you are under surveillance.”
The Independent Reserve’s annual survey found that 28.6% of Australians who do not currently own cryptocurrencies say they would invest if there were better consumer protections in place.
Bitcoin remains the best-known and most popular cryptocurrency in Australia, ahead of Ethereum.
The 24- to 34-year-old age group was the most confident in crypto, with 27.6% saying they bought to get rich, while those aged 65 and over remain skeptical.
Visa spokesperson Anthony Jones said every financial institution will need a crypto strategy as Australians start to change their perception of money.
One in three Australian crypto owners say they would be likely or very likely to change their primary bank to one with crypto products within the next 12 months, according to a study by the digital payments giant.
Among cryptocurrency owners, the main drivers are wealth creation (40%), participation in the âfinancial path of the futureâ (34%) and fear of missing out on gains (28%).
But all is not as it seems.
The Australian Competition and Consumer Commission tells AAP that almost half of the investment scams reported to Scamwatch involve cryptocurrencies.
From January to November 2021, Scamwatch received 8,942 investment scam reports with over $ 150.4 million in losses. The tally is expected to exceed $ 164 million by the end of the year.
Their advice is to invest only what you can afford to lose.
Scammers often attract people with a low initial investment, but then use pressure tactics to encourage clients to invest more and more. When it comes time to cash in, the downside becomes obvious.
âWhile there are bogus crypto exchanges out there, crooks use legitimate sites to scam people, like asking them to pay with Bitcoin, so we generally urge people to use caution when using non-payment methods. traditional, âsaid an ACCC spokesperson.
People should always seek advice from a licensed financial advisor before making an investment decision, she says.
Mr Pucci said the recent collapse of myCryptoWallet and Blockchain Global, which operated the old ACX crypto exchange, was a prime example of why there should be regulation of exchanges.
âThere could have been capital requirements and basic guarantees,â he says.
“That’s why the best exchanges are around the table, literally, to support and encourage regulation – because they see it as differentiating their legitimate business.”
He cautions against any attempt to gain information through social media as to whether the hype, or a new meme, has been backed by anything.
âIt’s hard to tell, unless you’re in the industry, who’s good and who’s safe, and who isn’t,â he says.
“There is a huge range of tokens and coins that are absolutely zero so you have to sort the wheat from the chaff.”
Associated Australian Press