Cryptocurrency Update

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ASIC issues warning against SMSFs investing in crypto without an adviser

The Australian Securities and Investments Commission (ASIC) has issued a warning to those considering investing in cryptocurrency with their self-managed superannuation funds (SMSFs) without proper advice. The warning is in regards to social media or online advertising for ‘high returns’ or ‘investment opportunities’, and cold-calling, text message or email marketing recommending transferring superannuation into an SMSF.

World Economic Forum announces crypto ESG accelerator

The World Economic Forum and CoinDesk have developed the Crypto Impact & Sustainability Accelerator (CISA) to support global efforts to accelerate the development and responsible use of cryptocurrency. The new accelerator is set to help shape the future of crypto-enabled ESG efforts, to bring key players and industry leaders together. CISA aims to make progress on ESG targets by generating projects, learning and leadership globally.

Already in the CISA ecosystem are Andreesen Horowitz, Celo, Chainalysis, CoinDesk, Coinshares, Ernst and Young, Ethereum Foundation, Goldman Sachs, Grayscale Capital, Ripple, and the Stellar Development Foundation.

Visa announces crypto consulting for banks, merchants

Visa is pushing for mainstream adoption of cryptocurrencies by offering merchants and banks crypto consulting services to help them on their way. Visa’s crypto advisory practice, Global Crypto Advisory, in the consulting and analytics team, is to offer financial institutions, retailers and other companies advice on all aspects of crypto dealings - rolling out crypto features, non-fungible tokens, wallets, etc.

Visa did a recent survey, with the results showing that 40 per cent of crypto owners surveyed would be likely or very likely to switch their primary bank to one that offers crypto-related products in the coming year.

Visa has been busy filing crypto-related patents, and the team is working on a universal payment channel project - a blockchain interoperability hub that connects multiple blockchain networks and allows digital assets to move between different protocols and wallets.

Mastercard is not being left behind, how ver, with a recent launch of a crypto-linked payment card in the Asia-Pacific region, with PayPal launching a new consumer app for crypto, savings and direct deposits.

Visa crypto survey key findings

Visa recently conducted a survey amongst cryptocurrency holders and financial decision-makers in Australia on their intentions and views, with the following key findings:

  • Thirty-three per cent of Australian crypto owners say they would be likely or very likely to switch their primary bank to one that offers crypto products in the coming year

  • Awareness of cryptocurrencies amongst financial decision-makers in Australia is sitting at 93 per cent

  • There is growing adoption of cryptocurrencies - 27 per cent of Australian crypto-aware respondents have directly engaged with cryptocurrency as an investment vehicle or a medium of exchange

  • Amongst the 790 financial decision-makers surveyed in Australia, out of this 27 per cent, 59 per cent say their use has increased in the past year, with the remainder (73 per cent) do not currently own cryptocurrency, but 26 per cent said they’ve taken steps to learn more

  • Of crypto-owners, 36 per cent say they are very likely to use crypto to pay friends or family over the next 12 months, and 33 per cent are very likely to buy crypto goods like non-fungible tokens (NFTs)

  • The reasons for engaging with crypto include building wealth (40 per cent) and a belief that cryptocurrency is the ‘financial way of the future’ (34 per cent), while also not wanting to miss out on the rising tide (28 per cent)

  • There is a lot of interest in crypto-linked cards whereby you can shop as you would with a credit or debit card with regular retailers (74 per cent)

  • Additionally, 73 per cent are interested in crypto rewards, so earning cryptocurrency as a reward for card spending

  • The most willing to switch banks are crypto-owners, though 82 per cent are interested in buying cryptocurrencies from their bank

Download The Crypto Phenomenon: Consumer Attitudes & Usage (PDF)

Government reveals crypto regulation timeline for reforms

Federal Treasurer Josh Frydenberg has offered a forward plan for crypto-asset reforms in a speech to the Australian-Israel Chamber of Commerce (AICC), described as the most significant update to our payment systems in a quarter of a century.

A regulatory framework will be established for consumers, who are using crypto assets more than ever, and to clarify how new payment methods will be treated. The Treasurer said maintaining sovereignty over payment systems was important, with digital payments and crypto being viewed as an opportunity.

The reforms proposed are in line with recommendations made by the Senate Select Committee on Australia as a Technology and Financial Centre’s report on the topic, tabled earlier in 2021. The government has plans to start developing and introducing a licensing framework for digital currency exchanges and a custody regime for businesses holding crypto assets for customers.

The government has announced it is moving forward on an Australian first, a central bank digital currency (CBDC), with a pilot project planned for 2022. The Board of Taxation is to advise on tax frameworks, also in 2022.