“Australia needs its own digital currency, such as Bitcoin, that is underwritten by the Australian government so that middle market businesses can remain competitive on the global stage,” Mr David Knowles, Partner, Pitcher Partners International Institute of Entrepreneurship said.
“A DAU$ delivers the necessary trust that people require to transact digitally with confidence, by being a nationally recognised and government-backed digital currency.
“The opportunity exists for the Australian government to help facilitate the move to a more digitally enabled Australia, which will be good for business, particularly those in the middle market.”
Mr Knowles’ sentiments were echoed by globally-recognised fintech expert, Matthew Gardiner.
“A DAU$ would see Australia taking a global leadership position in cryptocurrency issuance which could deliver unique advantages to middle market firms,” Mr Gardiner said.
“ASIC’s Greg Medcraft has predicted that cryptocurrencies could render traditional bank accounts obsolete within ten years. UBS have recently begun work on a cryptocurrency with four partner banks following The Bank of England’s working paper on the subject.
“Japanese banks have announced their intention to introduce a digital currency in time for the 2020 Olympics, following Russia’s announcement of their intention to create one, whilst leading Chinese banks continue to develop advanced blockchain capabilities.
“Standards Australia is at the forefront of innovation in this fast moving space through their leadership of the ISO’s global blockchain committee. Macquarie attracted international attention with the opening of the Australian market’s first open banking platform in September this year.
“Middle market firms are well advised to keep up to speed and position themselves to benefit from the potential introduction of a DAU$.”
Mr Knowles believes the middle market, often described as the engine room of the Australian economy, could gain a real competitive advantage if a DAU$ was introduced.
“The middle market is best placed to capitalise on a DAU$. Small businesses don’t transact extensively with international trading partners using digital currencies. Big business will see the investment opportunities in it, but the middle market, comprising around 30,000 Australian businesses, employing a third of the workforce and representing a third of this nation’s GDP, would generate the most growth.
“Trade of all sorts requires trust between counterparties. The more remote the counterparty, the more challenging it is to facilitate trust. Cryptocurrencies built on the blockchain can engender that trust.
“Currently, Bitcoin and a small selection of cryptocurrencies are the main methods of transacting digitally. But, they are volatile and speculative, and seen to be fraught with risk and the broader community lacks the confidence to use these currencies for everyday trading.
“By facilitating trade with more confidence and efficiency using the blockchain, a DAU$ would potentially give Australian middle market businesses an edge over their competitors through the adoption of these technologies.”
With so much speculation in Bitcoin at the moment its ability to be used an accepted currency for trading, often known as a ‘fiat’ currency, is rapidly diminishing.
“Middle market businesses would likely prefer to be paid in Aussie dollars, digital or otherwise, rather than in a medium full of speculation.
“If the DAU$ had a relationship with the existing Aussie dollar business would trade more confidently, trusting in its value.
“It makes sense, and for middle market businesses, it makes even greater cents.”