Australian Super Funds Urged to Think About Crypto Exposure

September 04, 2021, 10:15 AM AEST - 3 weeks ago

With global crypto adoption up 880 percent over the past year and up to 70 percent of multinational institutional investors planning to invest in the sector in the coming 12 months, Australian superannuation funds are being urged to consider exposure or risk being left behind.

Different types of institutional investors. Source: Finoa

Australian Institute of Superannuation Trustees (AIST) 2021 Conference Talks Crypto

In a panel before the AIST, Genesis Block managing director Chloe White has argued that super funds that dismiss crypto risk underperformance and that crypto or blockchain-based digital assets ought to be viewed as an emerging asset class.

By failing to provide exposure to such assets to its members, super funds were at risk of falling behind:

It’s akin to asking in 1995 whether the internet should be adopted. It is something that seems very obvious in hindsight.

Chloe White, Genesis Block

At the same time, White acknowledged the challenge facing super funds and their position relative to innovation.

If you’re a super fund and looking at how you will be positioned 10 years into the future, it is very possible that your fund is going to underperform the market if you are the [only one] that is not providing any exposure or doesn’t have any exposure to this innovation at this stage of growth.

Chloe White, Genesis Block

Australian Securities and Investments Commission (ASIC) Innovation Hub senior adviser and lawyer Jonathan Hatch, who also spoke at the event, recognised how the industrial economy was shifting to a digital one where blockchain cryptocurrencies formed the underlying economic infrastructure.

Recognising that some digital assets were speculative in nature and prone to hype, he argued that there were also “some serious investments being made”.

This new technology [that’s only about] a decade old is the next-generation digital infrastructure for a global economy, upon which we can run financial systems, payment systems, identity managements systems, contracting systems and so on.

Jonathan Hatch, ASIC Innovation Hub senior adviser

Self-Managed Super Funds (SMSF) and Crypto

Earlier this year, a New Zealand-based pension fund, Kiwi Saver, disclosed that it had made an investment in bitcoin in October 2020. While its chief investment officer believes that most super funds in Australia will follow suit within five years, the reality is that Aussie super funds remain behind the eight-ball.

For most, the best way to gain crypto exposure is through an SMSF. While there are an array of different options in the market, Crypto News Australia has compared five of the best.

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