Bitcoin is not a fad, says Australia's minister of financial services

Australian Financial Services Minister Jane Hume has publicly supported digital assets saying they are not just a temporary trend. Furthermore, he said that decentralized finance (DeFi) presents "incredible opportunities" for Australia.

"We must recognize that this is not a passing fad"

Jane Hume, Australian minister and senator, responded to Tony Richards (Head of Payment at the Reserve Bank of Australia), who recently described cryptocurrencies as "bizarre". It also warned investors that the asset class has the potential for a slump, and therefore people could lose a significant amount of money.

In an interview for the Australian Financial Review, Senator Hume disagrees with the statement. He believes the cryptocurrency industry is a sensitive area that the local government should approach "with caution, but not fear." Australia's governing body should also refrain from viewing bitcoin and alternative currencies as a "fad:"

"As an industry and as a government, we must recognize that this is not a fad."

The politician added that cryptocurrencies have emerged over the years and have "captured the hearts and minds" of Australians. A recent poll revealed that around one in five Australians are owners. At the same time, Bitcoin (BTC), Ether (ETH) and Dogecoin (DOGE) are the most popular digital assets (here the quotation in real time).

Senator Hume touched on the blockchain-based form of finance that doesn't rely on central monetary intermediaries: decentralized finance (DeFi). He predicted it "will present incredible opportunities" in the future and, as such, "Australia must not be left far behind the unknown."

Cryptocurrencies are like the Internet in 1995

The Australian minister also compared the cryptocurrency industry to technological developments of the recent past, such as the iPhone or Excel, which were considered irrelevant at one point. Digital assets also resemble the internet in its early days and may someday become a dominant technology used by all, Hume said:

“Don't be the person who said in 1995 that the internet was just a place for losers and criminals and would never go mainstream. And don't be the person who argued that email was a fad ”.

Many experts see the volatile nature of the asset class as its main problem. Hume said the biggest price fluctuations occur because the industry is still in its early stages of existence:

"If the last 20 or 30 years have taught us anything, it is that all innovation starts as an interruption and ends as a household name."

Not long ago, Anthony Scaramucci - founder of SkyBridge Capital investment firm - gave a similar explanation. He compared bitcoin and altcoin with companies like Facebook, Amazon and Google, which initially faced greater volatility:

“I would classify bitcoin and these other cryptocurrencies right now as early adaptive technologies. And back to Facebook, Google, Amazon: they all started with a wave of fluctuating volatility before stabilizing ”.