Cryptocurrency is likely to be an election issue for millennials, according to an expert in risk and compliance.
TCM Capital’s Fred Pucci says some Australians are relying on the crypto market to help them buy a house or get ahead, but without the benefit of any safeguards.
“Some millennials are taking it to the extreme and putting all bets on,” Mr Pucci says.
“For the Liberals to have a policy that is going to help that market develop and be sustained with more of an Australian presence, and more Australian protections for investors, is going to be an attractive thing.”
But he says Treasurer Josh Frydenberg’s plans for regulation create a “weird limbo state” for crypto investors.
The overhaul includes a licensing regime for crypto exchanges and custody rules for assets, and draws heavily on the recommendations of a Senate inquiry chaired by fintech enthusiast Andrew Bragg.
“If you look at the fine print of Treasurer Frydenberg’s document, the timetable for the key planks of this are not going to come through, assuming they win the election and parliament passes the legislation, until mid to late-2022,” Mr Pucci says.
Chloe White, a former federal insider who guided policy thinking on blockchain and crypto-assets, is now managing director at Genesis Block.
“Like the rest of the digital asset sector, we’re very pleased to see the government taking the industry seriously,” she says.
“The major source of uncertainty is not the policy that’s been announced, it’s actually the upcoming election.
“The Senate inquiry was a bipartisan activity, and it would be great to see the opposition engage with the recommendations of the report to provide the certainty that the industry needs to make decisions about investment and hiring over the next year.”
Labor declined to provide a policy update.
“On the technology side, we’re very excited about the next 12 months,” Ms White says.
Mr Pucci agrees it would be a missed opportunity if Labor does not engage, with the silence worrying Australians involved in the market.
He says Senator Bragg has been very hands on during the 2021 inquiry to understand the way the infrastructure works – including blockchain technology, the exchanges, and the custodians.
“It does encourage them to see that the government is supporting that tech industry,” Mr Pucci says.
Ms White says the industry would love to see policy introduced quickly, but it was more important to get things right.
“Policy that is rushed and poorly designed can backfire, as we saw in the case of the New York BitLicense,” she explains.
The stringent New York regime put trading limits on state residents and required capital and costly licenses that most start-ups could not afford.
“There’s one more thing we expect to see in the next year and that’s more big-name investors like Carnegie choosing to take jobs and companies to crypto-friendly jurisdictions,” she says.