Fintech clarity to draw a line under the old ‘wild west’

A recent Senate inquiry into fintech, led by Liberal senator Andrew Bragg, was a welcome sign that governments can stay on top of the latest tech trends. Picture: Getty Images

Bitcoin was once the exclusive plaything of tech nerds and brave investors, but no longer. Crypto has well and truly hit the mainstream, with an estimated one in four Australians now owning a digital currency.

And amid a boom in cryptocurrency, digital wallets and buy now, pay later providers, Josh Frydenberg’s reforms will provide our local tech businesses and their customers the regulation they’ve been craving for years.

Until now bitcoin has been seen as somewhat of a “wild west” of investing, and for good reason. Investors have lacked the same consumer protections afforded to them with traditional banks, and have in some cases lost their entire portfolios when a company has gone under or if a cyber attack hits. No longer.

A recent Senate inquiry into fintech, led by Liberal senator Andrew Bragg, was a welcome sign that governments can stay on top of the latest tech trends.

Its recommendations were welcomed by industry, whose only criticism was that they wouldn’t be implemented soon enough. These businesses have been crying out for more regulation so that Australians can feel safe using their services.

The reforms come at a critical time. Two crypto exchanges have failed in the last two months – MyCryptoWallet and Blockchain Global – in part because there is no government guarantee for cryptocurrency exchanges like there is for banks.

And despite perceptions, crypto is now used by people from all walks of life.

“To my surprise, I’ve never seen an industry so keen for regulation,” Bragg told The Australian recently.

And buy now, pay later – while sometimes copping fair criticism around fees – has created thousands of jobs, and our local players are world-beaters.

Just look at Afterpay, likely to soon be acquired by Jack Dorsey’s Square at an eye-watering valuation of $39bn.

Buy now, pay later has proved incredibly popular with consumers, but the space has still lacked the overall regulation to ensure fees and competition are kept in check.

The government likes to talk about the jobs of the future, and the scepticism that follows is often warranted.

But here Australia has an opportunity to repeat Afterpay’s success many times over, and be a world leader that others will be keen to follow.

The next innovations across crypto and new ways of transacting will not be ones that we want to miss.