Cryptocurrency in Australia: Fostering Australia’s Economic Growth
Cryptocurrency in Australia: Fostering Australia’s Economic Growth

It’s been a decade since cryptocurrency has started leaving a mark on people’s mind. With the world becoming fully digitalized, the emergence of digital currencies in order to replace the traditional payment systems has to be a center of attention. Cryptocurrency has attracted the attention of both customers as well as businesses as using a private online exchange platform for payments brings benefits to both parties. According to a report, it is believed that by mid-2016, cryptocurrency has gained a lot of importance with almost 16 million Bitcoins were in circulation at that time and they are used not just by businesses but also by consumers. 

The Fate of Cryptocurrency in Australia

Australia, an ever-evolving country has been a subject of discussion and attention due to its increasing use of digital currencies. Australia treats digital currencies, in particular, Bitcoins as currencies for exchange (just like a barter transaction). The use of digital currencies like Bitcoin has been contributing to the innovation and competition of the vast Australian nation. It has rapidly changed the way Australians use their money for transactions. With the arrival of cryptocurrency, a new world of great opportunities has been opened for Australia that will lead this country to outstanding economic growth. It is highly believed that Australia is the most capable country to become a global hub of digital currency innovation due to various reasons including high smartphone technology, affordable internet access, a well-develop regulatory framework as well as increased use of electronic payment.

While being lured by the benefits that cryptocurrency brings to Australia, we should not overlook the challenges it might bring along. If cryptocurrency is to become a genuine financial instrument in Australia, it might face various issues like the issues of usability, security as well as confidence in these currencies. The Bitcoin Foundation and Bitcoin Association of Australia 2014 states the concerns about the role or lack of regulators and regulations and how do they affect innovation and entrepreneurship in Australia. Not just this, in fact, the change in tax policies related to the use of crypto currency can have a huge impact on consumers and businesses that trade with Bitcoins. According to The Economist Intelligence Unit 2014, Australia has secured its position on top of the G20 countries for e-Trade Readiness.

Impact of Bitcoin on the Australian Payments Sector

It will be no exaggeration to say that the emergence of cryptocurrency has totally changed the shape of payment sectors. With the arrival of digital transactions, Bitcoin in particular, much needed competition has been witnessed in the retail payments industry. To a great extent, Bitcoin has helped in cutting down the expensive systems offered by credit and debit cards. Also, the privacy and security issues which have always been a major concern for people, are simply eliminated. There is no denying the fact that Bitcoin has managed to bring Australia to the forefront of the next wave of innovation in financial services. The emergence of brand new business models can simply diminish the cost of simple transactions and also it will extend the financial services to all those people throughout Southeast Asia (around two billion) who are underbanked. 

Impact of Bitcoin on the Australian Financial Sector

The global payment network can be conveniently overturned and developed through Bitcoin as it offers unique payment options to the finance sectors. A lot of better efficiencies can be introduced to the Australian financial sector with the use of Blockchain technology including the improvement in existing services or introduction of new services, adjustments in fee structures as well as new and better ways to understand and monitor the governmental regulatory issues. It is also believed that the financial and monetary stability of the Australian banks is not exposed to any risk with the arrival of Bitcoin, in fact, there are high chances of growth in the banking business with more and more people exchanging cash for Bitcoin through different branches of the bank. 

How Bitcoin has been contributing to the economic growth of Australia

According to the Australian Banking and Finance, Australia is a global leader which has adopted non-cash payments rapidly. Another example of Australia being a global leader in non-cash payments is the report prepared by the Australian Clearing and Payments Association which mentioned that cash payments in Australia were just 47% in 2013 whereas 90% of all remote payments were done by the internet and smartphones.  This makes Australia an ideal market in which a digital currency industry can be grown as well as developed. To a great extent, Bitcoin has helped the nation in supporting its export-driven economy. The reason behind Australia’s strong export-driven industry is the reduction of cross-border transaction fees and the spread of the addressable market for Australian goods.

Written By
Alice Smith in Technology
11 Feb 2021