New-age financial institutions are stepping in to fill the gaps that traditional banks are failing to cover. The fact that the biggest players in the segment raised enough to hit a new quarterly high in Q3 2020, in the middle of the pandemic shows their potential.
The list of such institutions includes cryptocurrency-based too. These new currency forms have been developed using the recently introduced technology, and seek to change the very concept of currency altogether. For the first time, the currency is decentralized, meaning there isn’t a single authority like a central bank backing it. This fact opens the door to never-before-possible opportunities. And Australia looks set to cash in on this brand new future.
The country has taken steps to improve the crypto-based fintech ecosystem. As a result, there has been a rise in the number of crypto startups in the country. Their continued rise throughout these years, including during the pandemic, indicates that their plan is working.
Why The Coin Is Flipping In Their Favour
Australia had an average weekly income of $1,711 as of Nov. 2020 and a working-age population share of 65.1% as of June 2020. Therefore, there’s no lack of disposable income that people can invest in cryptocurrencies. Crypto startups have leveraged these and other similar advantages to grow their bottom line and look set to ride that wave into the future.
Crypto Usage Encouragement by Governments
The state government of Queensland set a precedent by introducing a grant of $8.3 Million under its Advance Queensland Ignite Ideas program. It was issued to crypto startups to foster innovation, and 70+ such companies got earmarked for the grant. Crypto tourism within its borders was a beneficiary, with the crypto-based tourism company like TravelbyBit, receiving its share.
The company aims to bolster tourist numbers to central Queensland via travel offers paid using cryptocurrencies. There’s also the benefit of job creation. And this is just one state doing so. Such encouragement on a national level is bound to boost investor’s trust in the country’s crypto startup scene.
Australia made all forms of digital currencies and related exchanges legal in 2017. It was a watershed moment as the cryptocurrency Bitcoin made waves with increases in its valuation that year. People’s interest grew significantly in this new form of currency thanks to that. It also made potential entrepreneurs and investors take note of it and act accordingly to build a fertile ecosystem in the country for the new money.
The currencies came under the country’s Anti-Money Laundering and Counter-Terrorism Financing Act 2006, improving clarity on transaction mechanisms while familiarizing them with ordinary money transactions.
They were classified as property and came under the Capital Gains Tax code, removing them from the earlier double taxation code under GST. This change encouraged people to further invest their money in crypto, and start-ups were there to offer an easy path to it.
Their ability to function as stocks also brought the Australian Transaction Reports and Analysis Centre (AUSTRAC) into the picture. Cryptocurrency exchanges have to register under it, and all of the regular rules related to stock trading, and some specific digital exchange ones, apply. This association offers legal stability, and a clear path for such exchanges to operate, further improving investments into them.
The Australian Securities and Investments Commission (ASIC), in May 2019, introduced updates to Initial Coin Offerings (ICO, the crypto version of an IPO) and crypto-trading. They further helped investors gain trust in crypto companies.
People have become more aware of cryptocurrencies and their potential in recent years. Crypto companies placing themselves as the gateway between potential investors and the currencies have upped their credentials and margins. Their introduction of app-based interaction for all investment needs has added convenience, further improving interest. Outreach and short programs act as the cherry on top of all this.
Australia looks set to forge ahead in the cryptocurrency revolution. And its crypto startups are at the forefront of it all, thanks to the support they get and the service they offer.