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Why Australia is Becoming a Global Leader in Crypto
Oct 11, 2018
With Japan accounting for roughly 60% of the global crypto transactions, the rest of the world is practically miles away from catching up. However, when we try to widen that net to establish where everyone else stands, you would be surprised to see the nations that have rapidly grown their crypto adoption activity over the last few years. And some of them are now among the hottest hubs for crypto startups.
Australia has over the last few years made major milestones towards becoming one of the global leaders in crypto transactions. While some of the G20 members continue to debate on how best to integrate the crypto market to the global financial markets, Australia seems to have forged ahead by implementing key measures while at the same time teaming up with giant tech players to take the crypto adoption in the country to the next level. The global cryptocurrency market has been tipped to hit $6.7 billion by the year 2025 and Australia will be playing a crucial role in the growth story.
How Australia Has Embraced Cryptocurrencies
Australia is the world’s 11th largest economy and unlike other major economies, it has been on the forefront in terms of crypto adoption. For instance, the Australian Stock Exchange (ASX) has been listing cryptocurrency platforms and blockchain companies since 2014 and has already established a plan to move the entire infrastructure to a blockchain platform within the next two years.
This will be a major step forward given the fact other exchanges including some in the U.S., and others from Japan and Switzerland, are only experimenting partial implementations of blockchain-based exchanges. Australia won’t be just listing bitcoins and other crypto for trading, the country’s main exchange wants to move everything to the blockchain.
The whole process seeks to replace the existing Clearing House Electronic Subregister System (CHESS), which is the core system used by ASX to perform clearing, settlement and other post-trade services for the Australian equity market. And according to a public consultation paper released by ASX in April 2018, the decentralized ledger system, which is expected to reduce transactions costs significantly is expected to go live in the fourth quarter of the year 2020.
This move will inspire more startups to join the likes of PowerLedger, which is a decentralized ledger technology startup that allows peer-to-peer electricity sharing in the blockchain innovation space. It could also inspire more people to join the crypto trading market. Currently, there are numerous crypto exchanges in the country that allow traders to trade multiple digital currencies. Some traders are still shy to try these and have opted to trade crypto via forex brokerage platforms like IC Markets where traders can trade up to six cryptocurrencies. On the other hand, the Australian government recently awarded IBM ( (IBM[NYE] - $142.69 Trade )) $1 billion AUD to develop blockchain innovation projects. This further shows how committed the country is towards embracing blockchain and crypto.
In addition, the country’s Department of Home Affairs (DHA) has also announced plans to use blockchain, AI and IoT to manage international trade and supply chain making it one of the few countries that are looking to fully embed the distributed ledger technology in the global financial markets.
How Will Digital Currencies and Blockchain Affect Australia’s Economy?
Digital currencies have the power to disrupt a country’s payments, retail and banking sectors, among others. With payments, one of the biggest bottlenecks in international trade is high transaction cost. By implementing a distributed ledger technology system or embracing digital currencies like bitcoin could reduce the transactions costs for Australia’s exports significantly points a 2015 publication by Mustafa Ally and others, of Queensland University.
Since the publication, the idea that cryptocurrencies and a blockchain-based international payments system could reduce transaction costs has now become a widely accepted concept and more countries have already launched pilot projects to test the theory.
On the other hand, the retail sector could benefit significantly with improved security in online transactions, which cryptocurrencies and blockchain provide. Cryptography, hashing and digital signatures are part of the reason why the cryptocurrency market has witnessed a rapid growth over the last few years. Given the limited, or lack of regulation in the crypto market, players in the industry have had to rely on technology to ensure security of transactions. Merging this with the e-commerce marketplace could boost the level of online transactions in the country significantly.
Australia is one of the world’s leading countries in online shopping with digital payments platforms like PayPal ( (PYPL[NGS] - $75.45 Trade )) and mobile wallets like Apple ( (AAPL[NGS] - $216.36 Trade )) Pay, among others, widely embraced by consumers. With the growing adoption of cryptocurrencies and blockchain in the forex market, the stock market, international trade and now by the Australian government, it would be correct to infer that consumers will be looking for opportunities where they can buy and sell ordinary goods and services using cryptocurrencies.
With nearly every aspect of the Australian economy embracing blockchain and crypto, the banking industry will be equally disrupted because it is the cornerstone of all financial transactions. And Australia, which is one of the world’s leading innovation centers and a hub for startup growth and incubation will continue to grow its share of the global crypto market. It has all the ingredients in place to become a global leader in terms of the rate of adoption.