The Reserve Bank of Australia has warned local investors that the
speculative frenzy on crypto could soon dry up if policymakers and
regulators step in.
The Reserve Bank of Australia (RBA) has warned Aussie investors about
speculating on digital assets as it casts doubt over the entire crypto
sector.
During a Nov. 18 address
to the Australian Corporate Treasury Association, the RBA’s head of
payments policy Tony Richards offered an overview on distributed ledger
tech, crypto assets, stablecoins, and central bank digital currencies
(CBDCs).
In his speech, Richards raised questions over crypto’s
validity and growth in 2021 as he took aim at the amount of capital
invested into memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB):
“The
recent boom in this area is perhaps best illustrated by the fact that
Dogecoin, a cryptocurrency that was started as a joke in late 2013, had
an implied market capitalization as high as US$88 billion in June this
year.”
“And the Shiba Inu token, which appears to be
equally free of any useful function, is currently the ninth-largest
cryptocurrency, with a market capitalization of around US$26 billion,”
he added.
Richards also asserted that public attention captured
by crypto in 2021 was “no doubt fueled by influencers and celebrity
tweets,” as he refuted the reported scope of how widespread crypto adoption really is in the country.
“Some
surveys have claimed that around 20 percent of the Australian
population hold cryptocurrencies, and one claimed that Dogecoin alone
was held by 5 percent of Australians. I must say that I find these
statistics somewhat implausible,” he said.
Richards outlined three
scenarios in which the “current speculative demand could begin to
reverse” in crypto that would essentially leave digital assets with
minimal use cases in his opinion.
Firstly, he argued that
investors may soon “be less influenced by fads” and FOMO and instead pay
more attention to warnings of regulators and policymakers.
Secondly,
he said that governments across the globe may aim to crack down on
energy-intensive proof-of-work-based cryptocurrencies such as Bitcoin
(BTC), and finally he said the tax authorities may aim to remove
anonymity to clamp down on financial crime.
Related: Aussie crypto companies keen to embrace regulations, says senator
Commenting
on Richards’ address, Steve Vallas the CEO of Blockchain Australia
refuted the speculative-focused arguments against the entire sector,
telling Cointelegraph that:
“Some regulators maintain an
unhelpful and narrow focus on the speculative elements of the sector.
That lens misses the remarkable infrastructure build that has occurred
in recent years.”
Crypto-friendly Senator Andrew Bragg, who is one of the key politicians behind the push to introduce robust crypto regulations in Australia echoed
similar sentiments, noting that “the RBA is short-sighted on
cryptocurrency. The utility and value to the economy of the technology
is enormous.”
source link : https://cointelegraph.com/news/rba-warns-aussies-over-punting-on-fad-driven-cryptocurrencies
