Crypto may face regulation in Australia

CANBERRA: Australians dabbling in cryptocurrencies have no guarantee of value, and nor should they, the Australian federal Government says.

‘‘[The] Government can’t guarantee your crypto any more than it can guarantee a painting or a share in a company, and nor should it,’’ a coalition spokesman said yesterday.

‘‘But we can make sure Australian exchanges, custodians and brokers — Australian players in the crypto ecosystem — work within a regulatory framework that is better, safer and more secure,’’ the spokesman said.

Australia’s market watchdog’s current reach only applies to cryptoasset investment products that fit within the legal framework for financial products and services, and the jury is out on whether cryptocurrencies are ‘‘assets’’.

The digital asset economy had already grown to $A2.1 billion ($NZ2.31 billion) and, with the right regulatory settings, could be as large as $A68.4 billion by 2030, the government spokesman said.

Market economist Stephen Koukoulas tweeted that one Bitcoin was still worth one Bitcoin.

Despite the most recent crash, neither major political party has committed to accelerating comprehensive reforms.

Australian Securities and Investments Commission (ASIC) commissioner Cathie Armour warned a cryptocurrency summit last month about the rise of the small investor during the pandemic and an increase in scams.

Australians had lost $A99 million to cryptoasset scams last year alone, and that figure was just what was reported.

ASIC also heard from Australians who had been caught out on unlicensed 24hour crypto trading platforms.

‘‘Some people experienced significant losses due to excessive leverage, platform outages, or unfair liquidations,’’ Armour said.

Fitch Ratings agency expected increased calls for regulation, particularly of socalled stablecoins such as Terra that were designed be pegged to the US dollar.

Last week’s failure of Terra’s peg had led to further liquidations, Fitch said. — AAP