How will the growing use of digital currencies impact Australia?
Digital currencies have become a global phenomenon, and their rise hasn’t bypassed Australia. Data from ADCA and Accenture suggests that Australia’s digital currency market is growing exponentially, and has been doing so for the past few years. The average value of a digital currency trade in February 2017 was $230, and by the end of the year it had risen to $1,800.
As societies become increasingly cashless, many consumers are turning to digital currencies instead. Incoming regulations are recognising this change, and are safeguarding digital currencies in Australia. This in turn, is opening up new opportunities for challenger banks to embrace digital currencies in their early stages. As banks, Fintech institutions and consumers begin to feel more comfortable in the digital space, the emergence of a truly digital economy will begin to snowball.
How will digital currencies impact Australia?
A paper published by the University of South Queensland in 2016 explored the impacts of digital currencies on the Australian economy, and the conclusion was optimistic.
Researchers found that digital currencies will impact three major sectors in Australia: payments, retail, and banking. Retailers, they suggested, will see the biggest benefits, which will include a significant reduction in payment processing fees for transactions made. Banks, on the other hand, should see minimal negative impacts except that they might be encouraged to reduce transaction fees in order to compete with the nominal fees offered by digital currencies and other digital banking options.
The paper concluded that ‘digital currencies hold significant opportunities for innovation in Australia’, but shared concerns that the progress of digital currencies could be stifled by lack of funding and enthusiasm from banks, governments, and regulators.
A long road ahead
Four years on, and digital currencies are still growing and taking up space in the Australian economy. We’re starting to see bigger banks and institutions accepting the positives that digital currencies can bring, namely a more streamlined market which offers new avenues for innovation and competition. It looks like digital currencies are here to stay.