Australian crypto exchanges: opportunities ahead

Apr 15 2022
Business Insights Crypto

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The first platforms enabling consumers and companies to buy and sell cryptocurrencies in Australia began to emerge in 2013, four years after bitcoin was conceived in 2009. Although many exchanges operated at a loss in the early days, Australia’s crypto exchange industry has grown rapidly over the past five years. According to the Finder cryptocurrency adoption index, nearly 23% of Australians owned cryptocurrency by December 2021, making it the nation with the third-highest rate of crypto adoption in the world.

Africa, China and other key growth sectors hold vastly different perspectives on crypto’s place in the future of their economy. With an unstable financial framework and high use of fast and cheap remittances, Africa is one of the most progressive centres for crypto development.

Meanwhile, China has banned all cryptocurrency transactions in favour of its own central bank digital currency (CBDC), the digital yuan. Following China’s crackdown on cryptocurrencies, many high profile Chinese exchanges and their customers migrated to Singapore, where regulations are more accommodating.

Led by the US, Canada and Singapore, crypto natives and a number of traditional heavyweights around the world are building regulatory bridges to facilitate widespread crypto acceptance and integration with traditional financial systems. As global leaders in the fintech industry, Australia is well placed to compete with the world’s crypto leaders, but has been somewhat held back by insufficient regulation and slow-moving policymakers.

However, the government is making efforts to give bitcoin national or foreign currency status, and Treasurer Josh Frydenberg announced plans to overhaul Australia’s payments industry in 2022, creating a suitable regulatory framework for cryptocurrency exchanges - a move welcomed by the industry.

Top Australian crypto exchanges

Of Australia’s 329 crypto exchange platforms, the companies with the largest market share are BTC Markets and Independent Reserve, followed by CoinJar and Peak Trading. However, there are other ways to measure success, and in research conducted by MarketPlace Fairness, Digital Surge has been ranked the best overall exchange platform for Australians.

Swyftx was ranked number two and praised for a demo mode that allows users to practise trading, while CoinSpot was dubbed Australia’s most trusted and externally audited crypto exchange platform.

As the industry matures and enters the mainstream, improving user experience has become a central focus for crypto exchanges. Here are some of the key features setting Australia's top crypto exchanges apart from the rest:

  • ASIC and AUSTRAC registration.
  • Intuitive interfaces for ease of use through desktop and mobile apps.
  • Mobile wallets for transactions on the go.
  • Low trading fees.
  • Access to a wide range of cryptocurrencies.
  • Access to other popular asset classes.
  • Ability to purchase directly in Australian dollars.
  • 24/7 customer support.
  • A variety of online payment options.
  • Access to fast payment rails and banking networks.
  • Dedication to security.
  • Ability to practise with demo mode.
  • Crypto insurance.
  • Referral programs.
  • Earning interest through staking.

Rather than letting Australia’s slow move towards regulation delay consumer trust, some of the top Australian crypto exchanges have already sought regulatory licences overseas. According to CEO, Adrian Przelozny, of crypto exchange, Independent Reserve, Singapore currently has the clearest and most detailed licensing requirements of any jurisdiction in Asia. The exchange has become one of the first to obtain full licensure approval under Singapore’s Payment Services Act.

Local factors influencing Australia’s crypto exchanges

Let's look at the global trends that will influence Australia’s crypto exchange industry in 2022 and beyond.

While most global markets aren’t oriented for Australian business hours, cryptocurrencies are traded 24/7, which may be one of the factors influencing Australia’s early adoption. In a recent survey by Savvy, 17.3% of respondents owned some form of cryptocurrency and 36% intend to do so in the future. Another survey by Saxo indicates 42% of Australians would use cryptocurrency if it were legal tender.

According to research undertaken in 2017, Australian crypto owners were predominantly white, mostly male (86%) and under the age of 34 (59%). The reason most often cited for this gender gap is that women tend to be more risk-averse investors.

More recent data on Australia’s crypto demographics shows that the number of women investing in crypto rose from 10.3% to 20% between 2020 and 2021, indicating that the industry is now perceived as less risky. For millennials, crypto represents an alternative to property investment.

Intended in part to prevent money laundering and the financing of terrorism, Australia’s new regulations will further reduce the risks associated with crypto. Driven by rising prices, the evolving blockchain sector and increasing consumer trust, Australian crypto transactions surged at least 63% in 2021.

From BPAY to buskers, the use of crypto payments in Australia is increasingly utilitarian, and 55 million non-cash payments worth $650bn are made in Australia every day. According to founder and CEO of research agency, Fifth Dimension Consulting, Lyndall Spooner, Australian businesses can no longer “keep their head in the sand and pretend crypto doesn’t exist”.

Covid-19 has accelerated the falling use of physical cash as a payment method. Binance Australia CEO, Leigh Travers suggests that Australia will become fully cashless by 2031, with crypto playing an increasingly large role in payments. With Australia’s economic recovery expected to gather momentum throughout 2022, local crypto exchanges may benefit from an influx of Aussies with more disposable cash and changed attitudes towards traditional investments.

Australia’s new regulations will also adhere to the government’s net-zero goals by addressing the energy concerns associated with cryptocurrency. Once the regulations are in place, Australian crypto mining is expected to rely exclusively on renewable energy sources.

Outlook and opportunities for Australian crypto exchanges

As cryptocurrency’s decentralised operation and freedom from government control are some of the key attractions for investors, heavy-handed regulation could have negative consequences for Australian crypto exchanges. Fortunately, the Australian government’s priorities for regulating the industry include consumer protection, cyber security, operator transparency, investor promotion and market competition. If an appropriate regulatory framework is established in close consultation with the industry, Australia's crypto exchange industry has the potential to compete on a global scale.

As the global industry matures and becomes less risky, Australian crypto adoption is expected to rise. In 2022, and beyond Australian crypto exchanges have the opportunity to leverage technology to ensure efficiency, agility and the best possible user experience for trading crypto.

While multiple payment options can enhance your value proposition and lead to growth, automation enables the agility and efficiency required to scale in a fast-evolving industry and will give Australian crypto exchanges a significant competitive advantage in the coming years. 

To find out more, download our guide on how you can use payment technology to improve the agility of your business.

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