When you think Australia, the first things that might come to your mind are beautiful beaches, great diving, wild and diverse animal life, and/or famous landmarks like the Sydney Opera house.
Australia is known for many amazing things; however, when it comes to web3 — what is the general feeling?
As part of my Web3 Review series, where I’ve looked at Dubai, Nigeria, USA, and Japan to-date, this article will focus on the question: “is Australia the hub of web3?”
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In regards to blockchain, Australia actually has a pretty deep history in the space. From Everledger’s original diamond supply chain application to the Australian Securities Exchange (ASX) attempt at rolling out a clearing & settlement modernization to Immutable building the future of gaming to the government’s National Blockchain Roadmap, there’s been quite diverse activity across tokenization.
While there have certainly been hiccups (like bans, banking issues, etc.) over the years, Australia continues to push forward with its blockchain initiatives: record venture capital investments in 2022, the central bank’s CBDC pilot, the launch of a web3 innovation centre, and multiple banks tokenizing money/securities, from the outside looking in — Australia looks to be making moves!
With that background, let’s look at some key focus areas:
Adoption: above average adoption rates
- 15% of Australian investors hold cryptocurrency (ASX)
- 29% of intending investors (not currently invested) are interested to invest in crypto in next 12 months (ASX)
Regulation: above average, but lagging other hubs
- Cryptocurrency is legal and treated as property
- Digital Currency Exchanges (DCE) are able to operate in the country, with a AUSTRAC registration and AML/CTF laws in place
- Cryptocurrency is treated as an investment product and therefore capital gain taxes apply via the Australian Taxation Office (ATO)
- Australia is planning on launching comprehensive token regulation, with a focus on customer protection — custody, exchanges, payments, etc., but this appears to be delayed until at least 2024
- On the down side, there’s been recent de facto regulation by the banks in clamping down on payments going to cryptocurrency exchanges (Cointelegraph)
Ecosystem: pretty strong and localised
- For many years, Australia’s Blockchain Week has been a well attended event
- Blockchain Australia is a prominent non-profit organization promoting the usage of blockchain tech in the country
- Upside DAO recently launched to support Australia’s web3 startups with capital — many leading web3 voices part of the launch
- With the likes of Everledger, Immutable, PowerLedger, STEPN, Virtually Human Studio, etc. headquartered there, there is a strong contingent of web3 startups
- Australia ranked 12th in 2022 for venture capital investment, meaning it’s a good place for startups (Deal Room)
Private Sector: average amount of activity
- Financial services sector sees exchange activity at ASX, cross-border stablecoin work at NAB, and tokenized carbon credits alongside CBDC-backed stablecoins at ANZ Bank, among others
- Organizations like Australian Open and Cricket Australia have both launched token-based applications
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However, a few areas need to get sorted out for Australia to truly thrive in this space: more clear regulation akin to what we are seeing in Dubai (VARA) and Hong Kong (SFC), a better relationship between traditional banks and cryptocurrency exchanges, and more private sector enterprise activity.
Overall, Australia could become a key web3 hub in the future. Given Australia is geographically closest to the likes of Japan, Singapore, and Hong Kong, where web3 is finding it’s home, the country has a regional advantage from the get-go. In addition, I believe that there is a strong local ecosystem which, when accompanied with the government’s investment and support, will set Australia up to play a key role for many years to come. The time to act is now.
What do you think?
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