Australia's Tech Council launches groundbreaking digital assets report

The Tech Council of Australia’s Digital Assets in Australia report highlights the need for Australia to be a leader in responsible and trusted digital assets innovation. Having supported its production, Team Zepto attended the report’s launch at Parliament House in Canberra. Here’s what went down.

The Tech Council of Australia [TCA] believes that the transition to a digital assets-based economy should be underpinned by smart regulation that fosters responsible and smart innovation. Australia has a thriving fintech ecosystem which positions it to lead innovation in this space globally.

It’s in this context that the TCA released its latest report: Digital Assets in Australia. The Report was commissioned by TCA, prepared by Accenture, and proudly sponsored by Zepto, Afterpay, Finder, and Holon.

After a welcome by TCA CEO, Kate Pounder, and remarks from Anthony Eisen, Afterpay co-founder, the report was officially launched by the Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services.

The report aims to help Australia’s regulators and policy-makers navigate the way forward to create a trusted, well-regulated Australian digital assets sector – as adoption becomes widespread – by shifting from a precautionary to a more proactive and holistic approach to regulation.

“It’s a compelling read,” said Zepto CEO, Chris Jewell. “Australia’s evolving digital assets market is truly exciting. Digital assets have the potential to increase efficiencies and innovation in the payments system—and in turn, the economy—through the automation and streamlining of the payments processes. This will have a profound impact on Australians through the creation of faster and safer methods of exchanging value.”

What are digital assets?

Digital assets – such as private stablecoins, central bank digital currencies (CBDC), tokens and cryptocurrencies, supported by complementary innovations such as blockchain and Web 3.0 – are a collection of technologies that enable digital representations of value to be transferred, stored and traded electronically.

Some of the report’s findings include:

• Australia could add up to $60B per year to national GDP by 2030 by supporting a strong and sustainable digital assets [DA] sector.
• Australian businesses could save 200 million hours per year by using DA to automate GST compliance and administration.
• Appropriate policy action could see 700-1000 new start-ups and $15-20B in investment in the DA sector in 2030.
• Merchants can save $300M per year in losses avoided from fraud due to the improved security of DA over traditional payment cards.

“Digital assets have great potential to transform the way Australians transact and interact, from real-time payments and instant settlement of business loans to better supply chain tracking and secure digital identities,” said Kate Pounder. “Australia has an opportunity to be a leader in the responsible use of these technologies, building on our long history of financial and payments innovation and our position as a regional financial hub with effective financial institutions, tech-savvy consumers and a successful RegTech sector. We want to see Australia capture the economic opportunities of digital assets, but we want to see it done in a responsible way.

The report recommends the development of a principles-based regulatory framework, with clear objectives to support responsible digital assets innovation, unlock the economy-wide benefits of digital assets technology, promote financial and digital inclusion, protect businesses and consumers, and support financial stability.

As Chris Jewell pointed out during the panel discussion, Digital assets are so much more than just cryptocurrencies.

“Putting that asset class aside, the technology that digital assets unlocks is incredibly valuable. At Zepto, we’re primarily focused on payments, so when we think about digital assets we think about how they influence use cases that can deliver cost efficiencies back to businesses and consumers. The report highlights, for example, the high cost of cross-border payments, digital assets can alleviate costs around that,” said Chris.

“We also think about cash flow and supply chains. Zepto was born out of the company founders’ debilitating cash flow experiences running a skydiving business. Cash flow was so critically important to the lifeblood of that company. And so we think about how might we use smart contracts and consent to enable that cash flow to move more freely and provide certainty around it. In some ways, we’re talking about building the infrastructure of trust,” he added.

Commentary from Chris Jewell, CEO, Zepto

On the launch of the Digital Assets in Australia report

“Zepto, together with the Tech Council of Australia, Accenture and other partners, are extremely positive about the outlook of digital assets both here in Australia and abroad—and there’s a $60 billion opportunity with Australia’s name on it.

“The benefits of digital assets stretch far beyond cryptocurrency itself and have the potential to increase efficiencies and innovation in the payment system through the automation and streamlining of the payments process. Australia’s payment system is the fundamental infrastructure that supports the flow of value through the economy and enhancing this with trust, speed, and security is key to supporting a thriving economy. Zepto is already building the foundations for digital assets in Australia, and we envision the likes of stablecoins, cryptocurrencies, and CBDCs to allow faster, and more secure transactions.

“Similarly, the tokenisation of real-world assets can increase liquidity, accelerate settlements, lower costs, and lower the barrier for entry for many Australians. Underpinning that, complementary innovations such as blockchain technology, smart contracts, and decentralised finance will result in a better, trusted experience for consumers and organisations, while saving them money. This will have a profound impact on Australians through the creation of faster and safer methods of exchanging value.

“While it is positive to see Australia’s bustling digital payments ecosystem take off, but there’s still plenty of work to be done in the regulatory space. Australia has a thriving fintech ecosystem, so we are in a prime position to lead innovation in this space globally. However, we need to make sure that the transition to a digital assets-based economy is underpinned by smart regulation that fosters innovation.”

On regulation, post-FTX

“The Treasurer should be commended for his swift and responsible response to the collapse of FTX. This is the type of custodial regulation that will help to protect Australians without slowing down innovation. We hope this report will act as a catalyst for the government to work collaboratively with the sector not only as a regulator, but as a partner who promotes and invests in creating a safe and thriving digital assets ecosystem here locally.

“However, we would like to note the adoption of digital assets should not be considered in isolation of other government frameworks and infrastructure, including CDR and the NPP. At the end of the day, regulation in this space is not well established anywhere in the world, so we have the opportunity to lead the way, and each of these frameworks will play an important role in positioning Australia as a global leader.

“The recent collapse of FTX is evidence enough that, like any market, digital assets must be met with regulatory frameworks that enhance transparency and protect the consumer. Australia is poised to become a leader in the global digital assets market. Regulatory action that balances the protection of consumers and encourages innovation is key to capturing this opportunity.”

Additional comments

“Developments across the digital assets landscape are enabling a new generation of fintechs like Zepto to unlock incredible value, transparency, and efficiencies relative to traditional financial services and existing banking frameworks. We believe that these advances will have a positive impact on our digital economy and welcome the opportunity to work with industry and government to enable responsible and trusted innovation in this space.”