Blessing in disguise

Australia’s tough stance on cryptocurrency regulation has resulted in it falling behind the rest of the world in adoption, according to data from crypto analytics firm Chainalysis. However, this may have been a blessing in disguise, as it has helped protect consumers from fraud and corruption, as seen in the recent FTX collapse.

Despite being an early leader in cryptocurrency adoption, Australia has now fallen behind the rest of the world, and is at risk of being left behind. With its stricter approach to crypto regulations and its move to protect consumers, Australia now trails other nations such as Hong Kong, the United States, Dubai, the United Kingdom, and Switzerland in the global race to adopt cryptocurrencies. But, this strict approach to regulation may have actually been a hidden benefit.

According to data from crypto analytics firm Chainalysis, the country’s regulatory environment has moderated growth and put it at risk of falling even further behind as policymakers inhibit growth to protect consumers.

Despite providing state-of-the-art facilities, research and development, and government incentives to attract crypto entrepreneurs to do business in Australia, start-ups have left the country in droves. This has resulted in Australia ranking 15th on the “crypto-readiness” scale, tying with the Netherlands, both scoring 5.6 out of 10.

However, it’s not all bad news. In the face of volatile markets, higher inflation, and regulatory change, there are many reasons to be optimistic about the future of the Australian cryptocurrency sector. The worst is largely behind us, and much of the hard work done by the Australian government and its strict approach to regulation may have been a blessing in disguise, helping protect consumers from hacks, corruption, and fraud, as seen in the recent FTX fiasco.

According to Ishan Dan, CEO of Mo’Money, “It’s critical that we acknowledge the need for regulations in the crypto space. The government’s efforts to protect consumers from fraud and corruption are commendable, and we should leverage their efforts to create a safe and secure environment for investors.”

Mo’Money, an Australian startup that seeks to address climate change by leveraging blockchain technology to finance clean energy, has secured partnerships with leading solar companies and is looking to launch its seed capital $1m raise to fund development. Dan explains, “We believe that decentralisation can unlock the potential for a more efficient, equitable, and sustainable marketplace. By tokenising renewable energy assets, we can democratise access to finance and enable more people to participate in the fight against climate change.”

While it’s clear that Australia has fallen behind the rest of the world in terms of crypto adoption, the next six months are critical to the cryptocurrency industry. According to the Chainalysis report, 82% of the most active investors in 2021 made fewer investments in 2022 and are cashed up and ready to deploy. Australian startup funding tumbled by some 30% to $7.4bn from $10.6bn in 2021. However, there are already signs of the sector’s resilience, with a record number of VC funds announced, and more money than ever pouring into venture.

Dan notes, “The global crypto market has experienced a significant downturn, but there is still a lot of money to be made for those who are willing to take risks. We are excited to be at the forefront of a movement that is revolutionising the way we think about finance and energy, and we believe that Australia can still play a significant role in this transformation.”

Australia’s stricter approach to regulations and its move to protect consumers may have put the country at risk of falling behind in the great global crypto adoption race. However, the worst is largely behind us, and the country has an opportunity to leverage its regulatory environment to create a safe and secure environment for investors. With start-ups like Mo’Money leading the way in the fight against climate change, the future of the Australian cryptocurrency sector looks bright.