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Australia mustn’t ‘fear the unknown’ as Senator voices support for DeFi, crypto

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There has been a paradigm shift in the digital finance ecosystem. It started from the early stages of the Internet to Layer 1 cryptocurrencies such as Bitcoin. Now, there’s Decentralised Finance or DeFi, also called the “Wild West” of crypto.

This space has seen a lot of traction over the past year and a half. Consider this – The total value locked has risen from $17B in November 2020 to $257B today. Needless to say, popular quotes like “innovation begins as disruption and ends as a household name” are being thrown around to refer to DeFi these days.

That’s exactly what this Australian Senator believes.

Liberal Party Senator Jane Hume, speaking at the Australian Financial Review Super & Wealth Summit, lent support to this emerging ecosystem.

“DeFi is an emerging and rapidly evolving area of financial technology that presents huge opportunities.”

In fact, she also encouraged the ruling government to acknowledge that DeFi is “not a fad.” According to her, one needs to “tread cautiously, but not fearfully” because the technology is “not going away any time soon.”

“Decentralised finance underpinned by blockchain technology will present incredible opportunities ‑ Australia must not be left behind by fear of the unknown.”

She also spoke about the nature of major disruptions that have occurred throughout history.

“If the last 20 or 30 years have taught us anything, it’s that all innovation begins as disruption and ends as a household name.”

A majority, rather, all countries have taken major hits from the financial toll of the COVID-19 pandemic. Innovation and “uptake of technology” will define the economic future of a country and Australia finds itself on the same boat.

Worth noting, however, that a few local leaders have echoed their support for cryptocurrencies in general. Not so long ago, NSW Senator Andrew Bragg published a crypto-report. It incorporated 12 recommendations intended to tackle key issues pertinent to the cryptocurrency sector.

These changes or pro-crypto narratives were the products of surging crypto-traction in Australia. Before that, one of the largest banks in the region, Commonwealth Bank, announced it will allow the 6.5 million users of its banking app to trade 10 crypto-assets including Bitcoin, Ether, Bitcoin Cash, and Litecoin.

Having said that, there still are some major concerns associated with DeFi. Overall losses caused by DeFi exploits have totaled $12 billion so far in 2021. This could lead to strict regulations in a relatively unexplored area.

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Shubham is a full-time journalist at AMBCrypto. A Master's graduate in Accounting and Finance, Shubham's writings mainly focus on crypto-regulations across the United States and Europe. Also, a die-hard Chelsea fan #KTBFFH.