Around the world in 30 days

Australia’s Digital Asset Sector at a Crossroads

Let’s rewind.

In late 2023, Richelle Cox Cox and I recognised a shift in momentum in the digital asset reform agenda. The uplift in noise vs. signal in Australia’s digital asset sector masked the material reduction in sectoral investment both home and abroad.

Our efforts organising the Digital Asset Conference, Crypto Assembly, and the Top 50 List weren’t about filling an event calendar; they aimed to prioritise discussions on reform. These activations sparked interest, particularly from international audiences. Yet, the call to sustain this momentum locally wasn’t fully taken up, and the spark seemed to fade. Where momentum was needed, a sense of inevitability crept in. Unwarranted complacency.

As they say, reputation is what people say about you when you’re not in the room. When they’re not talking about you, you have a problem.

A Moment for Reevaluation: 2024 as a Fact-Finding Mission

Recognising this crossroads, we decided that 2024 should become a fact-finding mission. Our journey took us across global financial centres, each offering unique insights on how digital asset sectors are nurtured, progressing, or overlooked.

• Singapore - February: The energy in Singapore is palpable. They’re open to engaging with Australia, but their focus is sharp, and priorities are clear. Their hiring decisions reflect a belief that investing in the sector is a necessity, not just a luxury.
• Japan - March: Japan offers a unique perspective. A large, curious market that invites attention with humility and openness. Their approach is deliberate and inclusive, with a commitment to fostering open dialogue.
• Sydney - Policy Week: This event was our proof point, quickly amplifying interest from abroad. The key? Understanding both context and product-market fit. But once the dust settled, the spark went out again.

An aside

In my years working closely with Austrade across multiple jurisdictions, resource challenges and shifting priorities were a known reality. However, deprioritising fintech in the digital asset sector is a misstep, a choice made in isolation.

We can’t create the rules for games we play alone if we want to be on the global stage. Finance infrastructure is being reimagined, and we have an opportunity to be part of that conversation.

This isn't on "the list". That's a mistake.

A Reflection on Global Dynamics

As we traveled further, to the US, Switzerland, and beyond the reality became clear. In rooms with decision-makers, policy experts, and investors, Australia’s presence was minimal. Mentions of Australia as a regulatory jurisdiction were few and far between. Australians venturing abroad often do so alone, with little to no recognition of their nationhood.

For comparison, here’s the roster of players actively shaping the space:

• USA
• UK
• Singapore
• Europe (MiCA)
• UAE
• Asia

…Australia trails behind.

Returning to the UK: Why the RegTech Forum?

The UK is actively engaged in regulatory reforms intersecting with the digital asset sector -custody, stablecoins, staking, AML/KYC. While the political landscape took a brief pause due to upcoming elections, the ingredients for reform remain ready.

The market’s response to our event was overwhelming: banks, payments companies, custodians, exchanges, compliance professionals, policy experts, and lawyers participated with enthusiasm. Here, Australia’s sector was outshone, the UK’s traditional financial institutions were empowered to show up and engage with a single phone call. This autonomy and responsiveness are essential pieces Australia currently lacks.

While the traditional financial sector is cautious about DLT, blockchain, and crypto assets, the crypto industry often underestimates the compliance concerns that weigh heavily on financial institutions.

Across Europe, MiCA is out in the wild, with jurisdictions actively debating its application and addressing ambiguities. The path forward is uncertain, but there is momentum and a commitment to clarity.

USA USA USA

DC Fintech Week was a different beast. The views of the world were on show. The BIS, FSB, FATF, World Bank, IMF et al. The regulators, the reserve banks, the banks, the payments businesses, stablecoin issuers.

The message was clear. It's complicated, it's cumbersome and it's a work in progress. Risk and compliance dominated all discourse and KYC, AML and CFT were at the front of all conversations, and economic opportunity at the back. Both were present.

The inevitability was clear. The notable absence? Scepticism about what this technology can and will do.

Once more with feeling Singapore beckoned (again)

The regional pull of Singapore is unparalleled. The Singapore Fintech Festival, with 66,000 attendees, is a testament to that. In that environment, I asked the question, “What about Australia?” Let’s have a coffee, and I’ll share the answers.

Where To From Here?

Australia’s current state may feel stagnant, but it doesn’t have to be. The world is moving, and if we want to keep pace, we need to engage actively and intentionally. The choice to remain on the sidelines isn’t sustainable if we want Australia to be more than an observer on the global stage.

In my opinion this is not a regulatory issue. It's not an industry issue rather in large part it's a traditional finance and related sector issue. That's a conversation we need to have.

Today, we tie up loose ends. Tomorrow, we start the next march.