FORDHAM:
Cryptocurrency – everywhere I go I’m hearing about cryptocurrency and Bitcoin. It seems to be changing the world. Some people are becoming instant millionaires. Others are losing a fortune. Right now, around 18 per cent of Aussies own some form of crypto. That blows me away – nearly one in five Australians. We have the third‑highest rate of crypto ownership in the world and it is growing. But there has been a warning from the Reserve Bank. We spoke to our money man Peter Switzer about this. The Reserve Bank is saying, “Hold up. The good times will come to an end.” They say the whole thing is a fad, but Senator Jane Hume says otherwise. She is the Minister for Financial Services. She says Australia cannot be left behind by fear of the unknown. And Senator Jane Hume, the Minister for Financial Services, is live on the line. Senator, thank you for joining us.
HUME:
Good to be with you, Ben.
FORDHAM:
Have you invested in crypto?
HUME:
No, I haven’t personally invested in crypto. You know, crypto investments are very speculative. They are very volatile. It’s a high‑risk exercise, and it’s not for me. That said, Australians who choose to invest in that asset class should be able to do so, as long as they do it with their eyes wide open. And, most importantly, cryptocurrencies and, more importantly, decentralised finance, the technology that underpins that, which is blockchain technology, isn’t a fad and it isn’t going away. And that’s why Australia should step forward on this cautiously – that’s sensible – but not fearfully, because we are good at this. We are good at innovation and we are good at financial services, and there are many opportunities for Australia to grasp here.
FORDHAM:
Minister, I’m keen on it. I’m keen on having a look at it, but, you know, I’m a bit more traditional when it comes to investments, but I know very, very well regarded business people who put millions of dollars into Bitcoin and other cryptocurrencies. Are you coming across this everywhere you go? It seems to be the flavour of the month.
HUME:
You always tend to hear about the people that make lots of money on their investments. You don’t tend to hear about those who lose money, and there is definitely both. And it’s important to know that there’s the usual tax rules around cryptocurrency and all tax obligations remain. There’s no such thing as a free lunch, but it’s a risk that some people want to take and they should be allowed to do so.
FORDHAM:
Were you surprised when the Reserve Bank came out and said, “Look, this thing is a fad”?
HUME:
I think they were concerned that it was – there’s a bull run on a new asset class that a lot of people don’t understand, and we’ve seen that happen before with a lot of other investments, speculative investments. But the technology underneath, that’s not a fad; and I think that the Reserve Bank would agree. In fact, blockchain technology can be used for lots of different applications and that’s something that the Federal Government is looking at and also industry is looking at. That’s a good thing.
FORDHAM:
There seemed to be a major step recently when the Commonwealth Bank came out and said, “Okay, we will allow customers to hold and share digital currency on the CommBank app.”
HUME:
Yes, about 6.5 million Australians use that CommBank app. For anybody who’s actually interested in cryptocurrency, there’s also a really good podcast for first time investors on how crypto‑assets work on the Moneysmart website, the Government Moneysmart website. That’s at moneysmart.gov.au. That will really laid bare all the risks as well as the opportunities of cryptocurrency.
FORDHAM:
And you’ve got to be careful. Because of the appetite at the moment around cryptocurrency, you’re always going to have fraudsters who get involved, and we’ve spoken before about the nurse in Sydney who pumped all her money into a cryptocurrency investment and it turned out the whole thing was a scam.
HUME:
Well, in fact, scams have increased quite dramatically, particularly over the last two years while we’ve been in the midst of the pandemic. Scams are monitored by the ACCC, so I think that going onto that podcast and understanding where the risks are is a really good idea. But you should know that cryptocurrencies are, in fact, regulated. ASIC looks at investments. The ACCC looks at them if they’re a subscription or a utility and, of course, if it’s a currency, the RBA looks at it. And AUSTRAC is all over the money laundering aspect of cryptocurrency too.
FORDHAM:
There will be people listening and all this will be going over their heads. They will be thinking I don’t even understand what cryptocurrency is. So, as the Minister for Financial Services, lay it out in layman’s terms.
HUME:
Well, if you don’t understand what it is, you shouldn’t invest in it. And I think that’s the rule of them for all investments, whether it’s cryptocurrency or emu farms or even shares. So, I would suggest that you do your research before you invest in your cryptocurrency and make sure that you’re not getting scammed.
FORDHAM:
You’re saying it’s here to stay, though? That’s the main message?
HUME:
The technology is definitely here to stay and there’s plenty of opportunity for Australians to grasp that technology as long as we do so cautiously and not fearfully.
FORDHAM:
If you get any good tips on the crypto market, are you allowed to pass them on to us or is that against the rules?
HUME:
I would never provide investment advice to anybody. I’m not licensed to do so and I always recommend if you want investment advice, go to a professional adviser.
FORDHAM:
All right. I’m sure I’ll hear from some people right now who’ve made some money. I’d also love to hear from anyone who’s lost. Jane Hume, thanks for joining us.
HUME:
Great to be with you, Ben.