Australia: No Crypto Reserve Plans Despite Growing Interest

Australia's government has no immediate plans to establish a strategic crypto reserve, unlike the United States which recently announced its intention to include several cryptocurrencies in its reserve. This decision comes despite the growing interest in cryptocurrencies and blockchain technology in Australia.

The Australian government is currently focused on regulating digital asset platforms rather than investing in a crypto reserve. A spokesperson for the Assistant Treasurer and Financial Services Minister, Stephen Jones, stated that the government is working on building a regulatory framework for digital assets and recognizes the potential opportunities they present for the economy and innovation.

However, a change in government could potentially lead to a shift in policy regarding cryptocurrencies. The next federal election in Australia is scheduled to be held on or before May 17, and the latest YouGov poll shows a slight lead for the center-right coalition over the center-left Labor government, with 51% to 49%.

While the idea of a crypto reserve is popular, industry experts have raised concerns about the potential risks and challenges. Tom Matthews, head of corporate affairs at Australian crypto exchange Swyftx, noted that managing a crypto reserve could be complex and may create concentration risks with certain tokens. He also pointed out that the price volatility of cryptocurrencies could pose a problem for a reserve aimed at hedging against crises.

Kraken's managing director for Australia, Jonathon Miller, believes that cryptocurrencies have already established themselves as investment-grade assets, with exchange-traded funds (ETFs) and superannuation funds already investing in them. He suggested that long-term asset allocators like the Future Fund and Treasury could consider investing in cryptocurrencies.

Regulators in Australia have been paying closer attention to the crypto industry. The Australian Transaction Reports and Analysis Center (AUSTRAC) has announced plans to shift its focus to the cryptocurrency industry in 2025, and the Australian Securities and Investment Commission (ASIC) has released a consultation paper on proposed guidance for crypto, classifying many digital assets as financial products and requiring firms dealing in crypto to be licensed.

Australia has also emerged as a hub for Bitcoin and crypto ATMs, with over 1,453 ATMs currently in operation, up from 67 in August 2022, according to coin ATM Radar data.