Cryptocurrency Not a Fad Despite RBA and ASIC Warnings

Jane Hume, the Australian Financial Services Minister, has publicly supported bitcoin, calling it a technology that will not go away anytime soon.

“As an industry, and as a government, we need to acknowledge this is not a fad. We should tread cautiously, but not fearfully,” Hume said on Monday morning.

“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.”

According to Ms. Rinehart, the Commonwealth Bank of Australia’s recent decision to allow its customers to keep and utilize crypto assets has signified that the federal government would “embrace innovation” when it comes to decentralised finance. The Reserve Bank of Australia (RBA) isn’t on the same page, though. Last Thursday, RBA

“I think there are plausible scenarios where a range of factors could come together to significantly challenge the current fervour for cryptocurrencies, so that the current speculative demand could begin to reverse, and much of the price increases of recent years could be unwound,” Richards said.

In the long run, there are a variety of reasons why consumers may be less enthralled by cryptocurrency “fads,” and how they could invest less in these digital assets. He also said that regulators might one day put greater emphasis on the massive amount of energy consumed in mining proof-of-work cryptocurrencies and crypto being utilized in unlawful activities and

According to Kwon, central bank digital currencies will continue to be developed; cryptocurrencies will find only “niche applications” at the most.

“If so — and also reflecting that the relevant code is often open-source, publicly available and easily copied — it seems plausible that current valuations of many cryptocurrencies would not be sustained,” he said.

On Monday, the Australian Securities and Investment Commission (ASIC) took a similar standpoint to the RBA, with agency chair Joe Longo stating that investors in crypto assets should exercise extreme caution.

“The maxim, ‘don’t put all your eggs in one basket’ comes to mind,” Longo said.

“Those here who are directly involved in the broader managed investments sector will understand the serious implications of investing without understanding. It is not an approach to be undertaken lightly.”

In order to combat the epidemic, which he believes has already infected a significant number of people in Australia, Mr. Longo was compelled to issue the warning.

“This debate is no longer on the fringes of the financial services industry,” the ASIC chair said.

“ASIC does not strive to eliminate risk. But, nor should we ignore it. ASIC will always enforce the law as it stands, using the many means available to us. We need to be careful those laws keep pace with change, and with the community’s realistic expectations and demands.”

Last Tuesday, one week after the federal government designated blockchain as a key technology it will prioritize, David Hume released a video in which he praised cryptocurrencies.