If these BNPL apps start offering bitcoin trading, it would be in keeping with the sector’s focus on younger people’s financial habits.
A survey from Finder.com, which has recently started offering crypto trading, found about one in six Australians own some cryptocurrency. Among Generation Z (those born between 1997 and 2012), it found 31 per cent of respondents held some of the asset class as an investment.
Yet despite its growing popularity, the crypto sector remains largely unregulated, prompting some to argue for a legal regime to protect consumers.
So, how do you regulate a sector that was deliberately set up outside the existing system, as an alternative to conventional money?
NSW Liberal Senator Andrew Bragg is chairing an inquiry into this tricky question, and it has heard from a range of parties, including cryptocurrency firms and regulators.
On the side of the bitcoin sceptics are central banks, including the Reserve Bank of Australia (RBA).
The RBA told the inquiry cryptocurrencies can be “very volatile, and so they are a poor store of value.” It added that “many observers” had predicted that crypto may only end up having “niche uses and that current valuations of many… are unlikely to be sustained.”
But even if we accept that crypto assets are high-risk, there is a legitimate argument that since they are becoming more popular, regulations should at least give consumers and businesses more certainty about what they are dealing with.
Along these lines, several players in the industry support a licensing regime covering crypto operators, and clearer laws governing the “custodian” businesses to manage the assets.
Finder.com.au chief executive Fred Schebesta, a keen bitcoin supporter, even suggests making Australia an “innovation zone” for crypto assets, as a way of allowing a new industry to grow.
He argues investors can handle the volatility, and says this should reduce over time as bitcoin matures. “I think the volatility is something that people are aware of,” he says.
One thing that looks fairly certain is that debate about bitcoin is not about to disappear. Indeed, the dual-listing of Square will probably bring it to the fore.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.