Speaker 1: From Swartz Media. I'm Daniel James. This is seven am.
Speaker 1: Crypto is skyrocketing ever since Donald Trump won the US selection.
Speaker 1: Trump is set to lead the most pro crypto administration ever,
Speaker 1: promising a crypto advisory cancel and appointing a prominent pro
Speaker 1: crypto hedge fund manager as his pick for Treasury Secretary.
Speaker 1: His campaign received considerable donations from the crypto industry, and
Speaker 1: there's hopes among the industry he'll come good on his
Speaker 1: promise to create a national bigcoin stockpile. Today, managing editor
Speaker 1: of the Saturday Paper, Emily Barrett on why Trump backs
Speaker 1: crypto and what it means for the global economy. It's Wednesday,
Speaker 1: November twenty seven. Emily. It seems like crypto is some
Speaker 1: think will either know a lot or nothing about. But
Speaker 1: what we do know is that it's going to gain
Speaker 1: busters since Trump was elected. So can you explain why
Speaker 1: that is?
Speaker 2: Yeah, So the reason is that Trump has clearly declared
Speaker 2: himself the crypto president.
Speaker 1: This afternoon, I'm laying out my plan to ensure that
Speaker 1: the United States will be the crypto capital of the
Speaker 1: planet and the bitcoin superpower of the world.
Speaker 2: And we're getting there. So Trump, you know, he used
Speaker 2: to be not such a fan of crypto. You know,
Speaker 2: he's own record in the past saying that he thought
Speaker 2: it was too volatile. But I think that we got
Speaker 2: to the point really where Trump began to have a
Speaker 2: few crypto sponsors in his ears.
Speaker 1: So nearly half of all the corporate money being.
Speaker 2: Pumped into this year's election is coming from a crypto industry.
Speaker 2: According to a new the industry raising more cash for
Speaker 2: twenty twenty four campaigns than any other single issue group.
Speaker 2: The crypto industry was pouring like one hundreds of millions
Speaker 2: of dollars into the presidential race. It was supporting lots
Speaker 2: of packs, and essentially, you know, Trump was kind of
Speaker 2: chasing votes. He had been told by several influential people
Speaker 2: in the crypto industry that you know, there were sort
Speaker 2: of upwards of twenty million votes to be had, and
Speaker 2: particularly among a demographic that he's very sympathetic towards a
Speaker 2: sort of a young male contingent who were very strong
Speaker 2: boosters of cryptocurrencies. And so he's had something of a
Speaker 2: kind of come to crypto moment over the past few years.
Speaker 1: So it's had a long and checked sort of background
Speaker 1: as a market, but how did the fascination with crypto
Speaker 1: come about. What's the appeal from a financial perspective.
Speaker 2: So, certainly the main thing that we know about crypto
Speaker 2: is that you can make a lot of money very fast.
Speaker 2: You can also lose a lot of money very fast.
Speaker 2: You know, cryptos sort of starting in two thousand and eight,
Speaker 2: for a long time it was just trading around ten US.
Speaker 2: Since this is bitcoin, which was the sort of largest cryptocurrency.
Speaker 2: It went from sort of twenty five twenty seventeen, and
Speaker 2: then it fell back to six thousand. You know, it's
Speaker 2: had all these peaks and troughs over the years. We
Speaker 2: had it getting to a peak of eighty eight thousand
Speaker 2: in November of twenty one, and then it fell right
Speaker 2: back to twenty five thousand, So you know, it's literally
Speaker 2: halving its value in the course of these massive crashes
Speaker 2: that we've seen. Now as I say, it's broken through
Speaker 2: one hundred and fifty thousand, it's really understandable that this
Speaker 2: financial instrument really came about and started to gain traction
Speaker 2: at the time of the global financial crisis. So we
Speaker 2: saw a lot of people who felt that they had
Speaker 2: been shut out of the economy, they'd lost a lot
Speaker 2: of money, they'd lost their houses. They were feeling as
Speaker 2: if the financial markets were really for the elite, for
Speaker 2: people who were wealthy investors. It also promised, you know,
Speaker 2: these massive games. All of a sudden, it became almost
Speaker 2: like a lottery. And because it was an unregulated market,
Speaker 2: it's been able to sort of grow really exponentially in
Speaker 2: the shadows. And so it can't be underestimated how big
Speaker 2: this market has become. It's now worth three point four
Speaker 2: trillion US dollars globally.
Speaker 1: I mean, during his campaign, Trump signaled an enthusiasm for cryptocurrencies.
Speaker 1: Can you tell me about what he said he would
Speaker 1: do if he got in.
Speaker 2: Yeah, So he was promising the opposite approach to what
Speaker 2: Biden had done, which was really overseeing a great theme
Speaker 2: of crackdowns on crypto. I pledged to the bitcoin community
Speaker 2: that the day I take the oath.
Speaker 1: Of office, Joe Biden, Kamala Harris's anti crypto crusade will
Speaker 1: be over. It will end, It'll be done.
Speaker 2: So what we heard about a lot from Trump during
Speaker 2: the course of the election campaign was the need to
Speaker 2: get rid of people who were sort of obstructing the
Speaker 2: crypto market. And among those people was Gary Gensler, who's
Speaker 2: the head of the SEC. That's the Security and Exchanges
Speaker 2: Commission that is the largest regulator in the US with
Speaker 2: overseeing the financial markets and instruments. Gary Gensler took a
Speaker 2: very combative approach to the crypto industry, which really put
Speaker 2: him offside with a lot of the executives and investors
Speaker 2: in that market. Nobody really liked what he was doing.
Speaker 2: The SEC managed to recoup something like eight billion dollars
Speaker 2: in penalties of a misconduct, and so obviously this was
Speaker 2: a person that has fallen well foul of the crypto fans.
Speaker 2: He was going to be removed by Trump as soon
Speaker 2: as he came to power on day one, I will
Speaker 2: fire Gary Gensler and appoint a new SEC chair, And
Speaker 2: he has now actually announced that he's stepping back and
Speaker 2: will be gone in January of next year. Trump has
Speaker 2: actually said things like he'll create a crypto Advisory Council
Speaker 2: that will help to sort of tell him what to
Speaker 2: do in terms of crypto policy. He's brought people like
Speaker 2: Elon Musk and Vivek Ramswami into a cost cutting regime
Speaker 2: for the government, and definitely they have his ear in
Speaker 2: terms of where digital currencies might be able to help
Speaker 2: in that effort. He's also mentioned that he would like
Speaker 2: to see more bitcoin mining. That's also a little controversial
Speaker 2: in the sense that bitcoin is not a particularly green pursuit.
Speaker 2: Mining this is incredibly energy intensive. Even Elon Lusk himself
Speaker 2: has acknowledged this. He used to accept bitcoin payments for Tesla.
Speaker 2: He halted them for a while there because he said
Speaker 2: that actually that was having more of an impact in
Speaker 2: terms of emissions and fossil fuels reliance than he was
Speaker 2: achieving with his cars. And Donald Trump promised to create
Speaker 2: a sort of a national stockpile of crypto, and so
Speaker 2: there would be a federal bitcoin reserve or a federal
Speaker 2: cryptocurrency reserve.
Speaker 1: Coming up after the break. What happens when crypto goes mainstream? Emily,
Speaker 1: A Trump administration could see cryptocurrency become more mainstream. So
Speaker 1: what does that look like in the real world?
Speaker 2: So if that means better regulated assets, then that would
Speaker 2: be a good thing, right, But that's not actually what
Speaker 2: Trump appears to be proposing. What we're likely to see
Speaker 2: is a lot of the long held sort of aspirations
Speaker 2: of an aggressively experimental market coming to fruition, a lot
Speaker 2: of them being met, more people getting invested, making it
Speaker 2: bigger and more pervasive and more part of the financial system. Right,
Speaker 2: regulators were already really struggling to keep up with crypto scams,
Speaker 2: and that may just get worse in a freer market.
Speaker 2: The broader the reach of crypto, the more damaging it
Speaker 2: can be if the laws and let alone the watchdogs
Speaker 2: can't keep it in check. If we see the boom
Speaker 2: and bust that we've seen so far in crypto, that
Speaker 2: can be a lot more widespread and had a lot
Speaker 2: bigger effect than it was to date.
Speaker 1: So a bigger market and one way the Securities in
Speaker 1: Exchange Commission stops going after the new crypto ventures, that
Speaker 1: could increase the risk of investing in crypto and had
Speaker 1: a whole bunch of knock on effects globally.
Speaker 2: Yeah. Yeah, that's the worst case scenario, I mean, and
Speaker 2: it's possible to look, you can try and be optimistic
Speaker 2: about it and say, Trump's presumably speaking to a lot
Speaker 2: of vario established institutional investors, none of whom really want
Speaker 2: to see a crisis. They may not be the best
Speaker 2: stewards of the economy, but they certainly you know, don't
Speaker 2: want to see their own assets destroyed. You know, you
Speaker 2: could hope that maybe there'd be some checks and balances,
Speaker 2: but we can't actually necessarily rely on that being the case,
Speaker 2: certainly not when there are so many boosters of crypto
Speaker 2: involved in the highest levels of government.
Speaker 1: And how do you think they continue. Growth of crypto
Speaker 1: with the United States will affect us here.
Speaker 2: Crypto is pretty pervasive in Australia. It's been hard times
Speaker 2: to the market over the last couple of years, so
Speaker 2: these numbers may have changed a bit, but definitely one
Speaker 2: in four at one point was what we were talking about.
Speaker 2: One in four Australians invested in crypto, so it's a
Speaker 2: big potential market. It's got a lot of room for
Speaker 2: growth as well. Our trends interest generally in Australia has
Speaker 2: been toward more regulation because we had a lot of
Speaker 2: people thirty thousand people and upwards here were actually embroiled
Speaker 2: in the FTX collapse that happened. Under stand bankman freed.
Speaker 2: You know, that's reached the eyes and ears of politicians
Speaker 2: here who are concerned about the risks that crypto poses.
Speaker 2: And what we saw actually after the US election is
Speaker 2: some politicians sort of coming out and saying a lot
Speaker 2: more about the action that needs to be taken to
Speaker 2: protect potential investors. So Liberal Senator Andrew Bragg has been
Speaker 2: very vocal about this. He chaired a Select committee on
Speaker 2: crypto regulation in twenty twenty one and among the recommendations
Speaker 2: arising for that were a market like licensing regime for
Speaker 2: digital currency exchanges and including capital adequacy tests and auditing
Speaker 2: and all of that would fall under the Treasury portfolio.
Speaker 2: So he's actually been very critical of the Albanese government
Speaker 2: for not legislating any rules for cryptocurrency exchanges, including the
Speaker 2: consumer protections that would come from that. And you know,
Speaker 2: we've got people like Stephen Johns whose name he and
Speaker 2: he's the Assistant Treasurer and Minister for Financial Services in
Speaker 2: the Labor government. He's working on steps towards regulating digital
Speaker 2: and crypto assets and compiled some legislation to head off
Speaker 2: scams and fraudulate behavior online. The steps are being taken
Speaker 2: to try and limit that, but we know that it's
Speaker 2: really hard to stay ahead of online scams. The risks
Speaker 2: that we sort of looked to in Australia is you know,
Speaker 2: we're struggling to implement gambling legislation. At this point, crypto
Speaker 2: does kind of chirbo charge that market as well. And
Speaker 2: you know, there's been the rise of crypto prediction markets
Speaker 2: where people can literally sort of bet, you know, also
Speaker 2: on political outcomes in elections. But there is a best
Speaker 2: case scenario in which you know, crypto is actually brought
Speaker 2: into the mainstream in the way that other financial assets
Speaker 2: have been over decades, and that is there are steps
Speaker 2: towards regulation that brings it better under the umbrella of
Speaker 2: the watchdogs, that fraudulent behavior is detected and penalized so
Speaker 2: that it can really make the market a safer place.
Speaker 2: And that would be the scenario in which you head
Speaker 2: off a crisis in which you end up with a
Speaker 2: more benign usage of crypto in Australia.
Speaker 1: Emily, it's all very fascinating and thank you for taking
Speaker 1: your time to run us through it.
Speaker 2: Thanks a lot, Daniel Grace talk.
Speaker 1: Also in the news, more politicians are speaking out against
Speaker 1: the proposed social media band for under sixteens, which Labor
Speaker 1: is hoping will pass this week. Yesterday, National Senator Matt
Speaker 1: Canavan told ABC radio that a band's clumsy hurdles could
Speaker 1: make the situation worse and could have free speech applications.
Speaker 1: Canavan joins the Greens and the Cross benches David Pocock
Speaker 1: and Fatoma pain in voicing concerns about the speed at
Speaker 1: which the bill was brought to the table and lack
Speaker 1: of detail as to how the band will work. It
Speaker 1: follows the government's review into the proposed band, which lasted
Speaker 1: just one day despite receiving over fifteen thousand submissions. And meanwhile,
Speaker 1: Donald Trump has already come out swinging on tariffs, promising
Speaker 1: to impose twenty five percent terrorists on his closest neighbors,
Speaker 1: Canada in Mexico from the first day of his presidency.
Speaker 1: In a post on far right social media, Trump said
Speaker 1: the tariff will remain in effect until quote drugs in
Speaker 1: particular fensonal and illegal aliens stopped the invasion of our country.
Speaker 1: Should he follow through with the tariffs, Trump will be
Speaker 1: breaking the free trade agreement between the US, Mexico and
Speaker 1: Canada that he signed into law in twenty twenty. That's
Speaker 1: all for our We'll be back tomorrow.