By Alicia Maher
The Reserve Bank of Australia (RBA) has issued a warning to Australian investors about investing in crypto assets, casting doubt on the whole cryptocurrency industry. When speaking to the Australian Corporate Treasury Union on Nov. 18, RBA director of transactions policy Tony Richards provided an outline of blockchain technology, stablecoins, crypto assets, as well as central bank digital currencies (CBDCs).
The sum of capital engaged in memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB) was a target of Richards’ speech, which questioned the legitimacy of cryptos and their growth in 2021. Richards stated, “The recent uptick in this region is somewhat best demonstrated by the reality that Dogecoin, a virtual currency that was initiated as a quip in late 2013, had an assumed market valuation of as high as USD 88 billion in June of this year.”
‘Unbelievable Statistics’
He went on to say that the Shiba Inu coin, which looks to be devoid of any meaningful functionality, is presently the ninth-largest crypto in terms of market value, with a market valuation of over USD 26 billion. Richards also said that cryptocurrency’s public interest in 2021 was boosted by advocates and celebrity tweets. He disputed reports about the extent to which cryptocurrency use is mainstream in the nation.
According to certain studies, it has been reported that about 20% of Indigenous Australians hold cryptocurrencies, with Dogecoin alone being owned by 5% of the country. He went on to remark that he thinks these figures are a little unbelievable. Richards offered three possibilities in which present fanciful demand may begin to revert in cryptocurrency, which, in his view, would effectively render digital assets of little use.
First and foremost, he asserted that investors will soon “be less swayed by fads” and “fear of missing out” (FOMO) and will instead pay more heed to warnings from regulators and government authorities. The second point was that authorities across the world may want to crack down on cryptocurrency mining that consumes a lot of energy, such as Bitcoin (BTC). And the third point was that tax departments may seek to eliminate complete anonymity to crack down on fraudulent activity.
Authorities’ Unconstructive And Narrow Scope
In response to Richards’ speech, Steve Vallas, the CEO of Blockchain Australia, argued that the speculative-focused assertions against the entire industry were unconstructive and narrow in scope, telling reporters that certain regulatory authorities retain uncooperative and restrictive attention on the speculative components of the sector. Furthermore, such a perspective fails to recognize the extraordinary infrastructural development that has happened in recent years.
“The RBA is short-sighted on virtual currency,” said crypto-friendly Senator Andrew Bragg, who is among the major legislators spearheading the campaign to implement solid crypto rules in Australia. He went on to say that the technology’s usability and worth to the economy are both huge.