How Stablecoins And Strategic Policies Could Spark A Crypto Demand Surge

The managing director of Kraken’s Australian operation, Jonathon Miller, thinks Australia is in a good position to take advantage of the recent increase in interest in crypto, but has cautioned that smart legislation and thoughtful regulation of the industry will be crucial for its success.

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Speaking to Coin Telegraph at the Australian Formula One Grand Prix last month, Miller said he believes stablecoins have the potential to drive institutional adoption of crypto technology in Australia, but lack of regulatory clarity is currently hampering progress.

Inflection Point Driving Growth In Crypto

Miller said the launch of the Bitcoin spot ETFs in the US and the ensuing flood of capital into the crypto market marks a “positive inflection point” and signals that the market is very much back in a “positive place” following several dark years for crypto.

Miller also said that while the Australian crypto industry hasn’t yet seen the kind of institutional interest we’ve seen in the US recently, there has been a surge in retail investment and strong growth in startups and small businesses entering the space:

We‘re still seeing quite an increase in adoption here. People are starting to invest again, and many are building new businesses around crypto as well.

Jonathon Miller, Kraken Australia Managing Director

Stablecoins May Be Crypto’s Killer App But Regulatory Clarity Needed

According to Miller, stablecoins — cryptocurrencies which are pegged to the value of fiat currencies such as the Australian dollar — may be the ‘killer app’ that drives mainstream institutional adoption of the technology.

He said many of the businesses he deals with in the Australian crypto scene are built around stablecoins, but that slow progress drafting relevant legislation and a resulting lack of regulatory clarity is making it hard for these businesses to attract the investment they need to reach their full potential:

It’s very hard to take risk and invest in the crypto space in Australia because there’s just that lack of certainty.

Jonathon Miller, Kraken Australia Managing Director

While the process of creating legislation and getting real clarity around crypto’s legal status has been painstakingly slow, Miller said his interactions with government have been positive:

All of our engagement with Treasury has been positive. Our next challenge is to kind of get the government to prioritise legislation. It’s very hard to do that, but I think we’re getting closer.

Jonathon Miller, Kraken Australia Managing Director

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Despite these positive interactions, Miller also cautions that any local legislation must be drafted with a thorough understanding of crypto’s international nature and be careful not to undermine its most promising use cases:

You really don’t want to pull this fourth-dimensional money into three-dimensional space-time. At the end of the day, you want to keep it in its plane and then make sure the regulations actually mitigate the real risks.

Jonathon Miller, Kraken Australia Managing Director