- Andrew McPhee, the founder of crypto financial education firm Synergist, said Australia’s ‘fast follower’ approach to crypto regulation is driving Aussie web3 firms offshore.
- He also said Australia’s lack of professional financial advice on digital assets is acting as a handbrake on crypto investment among investors aged over 50.
Australia’s regulatory approach to crypto is driving innovation offshore, and its vacuum of high quality crypto financial advice is acting as a handbrake on investment, according to Andrew McPhee, founder of web3 financial education firm Synergist.
Speaking on the Tapping Into Crypto podcast on June 26, McPhee said Australia’s ‘fast follower’ approach to crypto regulation — characterised by simply copying advances from other more innovative jurisdictions — is becoming a liability and needs to change.
“We look at what America does, maybe the UK, and then we just copy what we think makes sense,” McPhee said.
The problem is, innovation’s happening so rapidly now that you can’t afford to be a fast follower because you’re locking the Australian ecosystem out of that innovation — all the innovation will go somewhere else.
Andrew McPhee, founder SynergistMcPhee said this approach has already driven innovative Australian web3 firms offshore to jurisdictions with a more forward looking approach: “Everyone’s going to UAE or Singapore, you know, to set up shop.”
And this trend is likely to worsen once the US passes its crypto legislation, predicted to happen before the end of this year, he argues.
The US is going to come out with their new regulations in the coming months, that’s going to attract, like a magnet, a lot of businesses to repatriate back into the US. Australia’s still gonna be 12 months away, you know we’re gonna see a lot of businesses just simply go ‘well, why would I go here’.
Andrew McPhee, founder SynergistRelated: AUDD Launches Natively on Hedera, Pioneering Australian Dollar Stablecoin Innovation
Lack of Advice Keeping Over-50s Aussies Out of Crypto
McPhee said one of the flow-on effects of Australia’s foot-dragging on crypto regulation has been a lack of quality, professional financial advice on crypto. He said that’s meant older Australians in particular have stayed away from digital assets, even as adoption among younger Aussies has continued to grow.
“If you look at the numbers, […] about 32% of Australians have crypto […] the 25 to 34 year old sector, […] more than 50% now own crypto,” McPhee explained.
When you get to the older demographics, the over-50s, it’s about 8% […] but that’s doubled in the last 3 years, so it is growing […] but either way it’s still well below the younger cohorts.
Andrew McPhee, founder SynergistMcPhee said this relatively low level of crypto investment by over-50s represents an opportunity for growth, but it’s currently being hampered by Aussie financial advisors’ lack of crypto knowledge.
We need to make it more accessible to that 50-plus bracket — they’ve got big portfolios, they’re seasoned investors…but they don’t have time, they don’t know about it and when they go and talk to their accountant or financial advisor about it they talk them out of it or just say ‘I can’t talk to you’ and just close the door in their face.
Andrew McPhee, founder SynergistThis issue is partly explained by a culture of close-mindedness around digital assets prevalent in the financial advice industry, according to McPhee: “If I was to generalise, 50% of the advisors I speak to fall into the pet rock category…you talk to them and you go ‘you just don’t get it and you probably never will’.”
And that’s frightening, because that’s a real risk to the actual advice industry in my mind.
Andrew McPhee, founder SynergistRelated: Australian Financial Industry Labelled “Negligent” Over Crypto Ignorance
But even among those who are open to digital assets, McPhee says there’s often simply a lack of knowledge around just how quickly the global landscape is changing.
They don’t understand that you’ve got sovereign wealth funds investing in it, you’ve got corporate treasuries investing in it, that there’s 670 million people worldwide holding cryptocurrencies today, that stablecoins — there’s more value transacted in stablecoins than in Visa and Mastercard networks combined. They don’t know this, because this is all recent — the last 2-3 years.
Andrew McPhee, founder SynergistFor advisors who are open to learning about digital assets, McPhee said the problem remains a lack of regulatory clarity around what they can and can’t say to clients, or who they can refer them to for expert advice.
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