Three main reasons that have enticed the crypto traders the world over include excellent investment opportunities in different types of digital currencies (the options are endless), the idea that there is anonymity in trading makes it appealing, and there is no interruption from a third-party are the main selling points why people are flocking to the crypto exchanges.
However, we have also seen that this is one type of trading, where it is highly unpredictable, and the market is volatile enough and as such not all traders like to face the risk of losing their money.
But if you are aware of how these crypto assets might behave in 2022, it becomes easier for you to plan your crypto investment portfolio. So, see more about the how the industry will take shape in 2022, in this brief article.
Survey data and crypto in Australia
Data obtained from survey from Senate Select Committee on Australia as Technology and Financial Centre indicates that 17% of Australians have cryptocurrencies and a further 13% are planning to invest in cryptocurrency in the current year. This would make Australia the world’s biggest adopter of cryptocurrencies if you take it on a per capital basis.
Commonwealth Bank of Australia recently said that it has plans wherein it would let customers go ahead with cryptocurrency trading like Bitcoin but on its mobile banking app.
Cryptocurrency trade – A High Risk Game
However, there are regulators and decision makers that believe that cryptocurrency lets traders take high risks. The Australian Securities and Investments Commission or the ASIC has warned in January 2022 that self-managed superannuation fund investors must be aware since a large number of crypt related scams are being reported with every passing day.
The ACCC or the Australian Competition and Consumer Commission assesses that due to investments, Australian had to lose over $150 million in 2021, in just a single year.
Why does it call for regulation?
Since this trade type lacks regulation, the incidence of money laundering and cyber attacks are on the rise. This has necessitated introduction of regulations in Australia sooner.
See more on what to expect in 2022 from the cryptocurrency market
Here is an outline of how things might move in 2022 in this industry.
- Current regulation
The role played by the regulators in Australia when it comes to cryptocurrency regulation is limited. Other than requiring the cryptocurrency exchange service providers to register with the AUSTRAC, the Anti Money Laundering and Counter-Terrorism Financing Act 2006 is not into regulation of digital assets and cryptocurrency. This only implies that the role of AUSTRAC’s in monitoring the financial transactions, keeping tab on money laundering and fraudulent activities is limited. Also, if the crypto assets are in the category of “financial products”, the ASIC has the power to regulate. The reserve Bank of Australia does not have the power in cryptocurrency regulation.
Ironically, those aspects that have attracted cryptocurrency traders to trade on these exchanges are the same reasons that have posed to be challenges for the digital asset regulators. As such, unless there is regulation, there always lies a risk of losing money for the investors. Most importantly, no regulations means the retail investors cannot be protected.