- J McGlynn and M Bacina
Minister Hume warns cryptocurrency is "not a fad"
Speaking at the Australian Financial Review Super & Wealth Summit summit, Senator Jane Hume has publicly backed cryptocurrency and told the Summit that, contrary to recent RBA comments "cryptocurrency is not a fad" but a technological advancement that can't be ignored.
Hume's speech follows recent crypto criticism from the Reserve Bank of Australia's outgoing Head of Payments Policy Mr Tony Richards who emphasized the risks and not the opportunities posed by cryptocurrencies, which he called a "fad". Mr Richards also suggested the value of cryptocurrencies would crash when central banks issue Central bank digital currencies.
Senator Hume suggested that cryptocurrency has “captured hearts and minds” of Australians and that innovation needs to be embraced by “encouraging personal responsibility through engagement and informed consent”. Senator Hume took aim at crypto critics, telling the summit that Australia risks missing out on significant economic opportunities if government and regulators are too fearful of embracing new technology:-
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 compared cryptocurrency to a number of ground breaking technologies and phenomena, like the internet, that experienced reluctance before their uptake (despite their revolutionary nature) to drive home her point:
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.
New ASIC Chair Mr Joe Longo was also speaking at the Summit and made some interesting comments including that he recognised the "extraordinary consumer and investor demand" in crypto, and that he had a "fascination with [Decentralised Autonomous Organisations]" rightly noting that the "modern corporation...seems a world away from [DAOs] virtual communit[ies]".
Mr Longo also made an interesting statement about tokens:
At present many crypto-assets are probably not 'financial products'...for the most part...investors are on their own
Given the absence of clear guidance from ASIC as to where the line may be drawn in relation to crypto-assets, an acknowledgement from the Chair of ASIC that "many crypto-assets" are "probably not 'financial products'" may be welcomed, particularly given the comments in the recent Bragg Committee Final report which also recognised that most crypto-assets were not likely to be financial products.
It is, however, worth remembering that comments from politicians and the ASIC Chair are not determinative of legal matters, which ultimately rest with the Court and Parliament - but the growing acceptance of crypto assets and public statements of support are critical as the government considers which of the Bragg Committee Recommendations it might adopt.