Peter Faulkner discusses cryptocurrency with The Informer's Michael Ray.

Michael Ray: Cryptocurrencies still all the rage with so much commentary in the media that it almost seems commonplace as a staple in the world of finance, but what we need to ask is all as it seems? Are we now engaged with cryptocurrencies as a society? Do we even understand what they mean to us as individuals, and who's using them? Are they actually day to day or are they still the realm of digital entrepreneurs, or even the dark web inhabitant? Well, today we've got Digital Pete, and Pete is the Head of Digital at DB Results, whose team are driving digital transformation across the Australian industry. And today, we're going to explore the topic of cryptocurrency, a little bit to help me, a little bit to help you, and the adoption and what changes in the market that will bring about this thing out of the shadows and into our everyday lives. So Digital Pete, where are we with cryptocurrency? What can you tell me?

Peter Faulkner: Well, first of all, hi and thanks for having me today. It's great to be back and into another mad sort of year. Look cryptocurrency it's interesting. Where it's a question of adoption. I think crypto has been around for a while now and certainly starting with Bitcoin and we've heard about that for years. But it's really interesting to look at the stats and there was a Saxo survey done recently and in Australia around about 10% of Aussies think they understand what cryptocurrency is, and it seems and within that, that's biased. About 21% of men and about 7% of women understand crypto and when you get over 65 the understanding really sort of drops off, so it feels like you really have to want to go and find out about it and go and do the research and it's still a little bit fringy in that regard. But some of the coins themselves are a bit better known. So we've all heard of Bitcoin, well 38% of us have, still below 50%. Ethereum 12%, and thanks to Elon Musk, Dogecoin comes in at at 8%. So, Shiba San dog we've seen everywhere that Japanese dog with the Dogecoin is certainly making that one a little bit better known but look if we think about where this all started, it used to be much easier to understand, there was Bitcoin and that was it. Then there was Ethereum and then there were others that came on the market, then everyone tried to capitalize, and there are now hundreds of coins on the market. It seems there's at least a new coin being released each week and it's so much to understand. It's getting so complicated for the average person to pick up and understand, that there needs to be a better way, for everyone to get their heads around it. But they’re some of the stats that we're seeing right now.

MR: They're very interesting numbers and they do tell a story but I wonder how accurate they are with 25% of people saying that they understand them. I think I might be included in that as someone who just nods as my eyes glaze over when I'm cornered at a party with somebody telling me all about the more you know, the constant emails about getting on this. How long till we see them as an actual day to day transactional thing, Pete, till we can actually go down the shop the shops with my digital wallet in my pocket, get the bread, the milk and some petrol with a Bitcoin or with a, a Dogecoin or Ethereum or any of the others how long until that actually happens?

PF: Yeah, look, it's something you can do now, but it's only if you I'd say, try hard conceptually. You've got to go and seek it out. It's not it's not pervasive. It's not everywhere. I've got friends who've set up crypto businesses where they provide a crypto POS terminal. So you could go to a bar and you could use your Bitcoin to buy a beer and that was a few years ago, but it was just for the enthusiast. There was like a club of crypto investors that would go in and play with this but since then, we've seen I think around about 800,000 Australians estimated to have owned crypto currency at some stage but I think a lot of people got into it from the get rich quick scheme sort of ethos in a bit of FOMO don't want to miss out, want to ride the wave and turn my $10 into $10 million based on the how the price of these cryptos allegedly are going to increase. But to get to payment it takes some other change possibly from the from the government to introduce the coin which is part of the plans they're starting to announce now. It takes, I guess a desire from businesses to want to trade on crypto and  that takes understanding even people who run those businesses. As well as I guess a groundswell of supply of people who want to turn up with their cryptos and buy and then it's probably demystifying some of the coins that are there and what a good for everyday trade what are  good for investment because there's a wide variety of differences in fluctuation in price and values. And the cost of a transaction also varies based on that coin. So we really need to see some sort of standardization some sort of government or more pervasive backed sort of cryptocurrency itself. And then I think we'll start to see it becoming more commonplace, but if you want to you can go and use it at the shops now.

MR: Well Peter all of those things you mentioned whether it's centralized or standardized transactions, government involvement, isn't that actually taking away or counter to the actual selling point of those who instigated Bitcoin, where they wanted none of the government, none of the centralization and free reign over it, couldn't that kill it off? Or for some further to the extreme to come up with something else?

PF: Yeah, maybe it's a coin for everyone. Maybe it's a different cryptocurrency for different purposes but if we think about, I'm thinking about adoption on mass, in general. If we want everyone to be using cryptocurrency or providing more people with the option to use cryptocurrency, we need something that's more acceptable to a wider section of the population. Sure the promise of blockchain implementations like cryptocurrency is that they're decentralize, there, it's peer to peer, the network provides the governance you don't need a separate body like the government governing how it operates. So, there'll be those who will look at a government currency and say, no I don't want to participate, and certainly over the years, we've seen that organized crime for example, they've leveraged that anonymity to use cryptocurrencies to do their trade because it's untraceable in a lot of circumstances. But a lot of that's changed as well. There's now more regulation around the entry and exit points of crypto, there's a better understanding from a government perspective.  For years, governments have been criticized for not really, fully understanding what crypto is and, and how crypto currencies work. In particular, how does how does currency move in and out of the country without being picked up for being over the $10,000 limit and being taxed? Well, it doesn't, it's just in the internet. So all of those things, I think are going to be debated that if we think about just for today, just about adoption, what's it going to take to get more people to get involved? I think there's some moves happening in the market that we need to look at now which are hoping to drive that uptake.

MR: We've just recently seen the Commonwealth Bank come out with a program and a definite initiative around this. Will that give some more security for those hesitant to get in, and with the volatility, is that a feature or flaw that may actually dissuade those going in? Because when we see those wild fluctuations where people make, you know, hundreds of thousands of dollars in a day because of those fluctuations, and then there's the opposite side, where it's not for the faint of heart where they lose the money even though it's unrealized profits, it's only paper profits, you haven't actually lost that reality, you know, what's going to happen there with the big players coming into the market, will that volatility go?

PF: Yeah, yeah. Look, I think the CBA move is a really big one. I think that's a great opportunity for pushing adoption within Australia. You're talking about one of the most widely used and certainly one of the top of the top internet banking application in the country, Commbank's right at the forefront there by adding in cryptocurrency capabilities to that app, that puts it in front of millions of people instantly. And then it's a question of, I guess how quickly that gets taken up and what features are actually in the app, and I think CommBank's got a great opportunity to go and test and learn and roll out new features and that will drive you know, how much of this is used for investment, how much of it's used for day to day payments, and everyday sort of banking sort of scenarios. It's yeah, and then as far as the fluctuations, well, it's about what which coins are being supported through a vehicle like the CommBank app, or, or other platforms. Some fluctuate wildly, and some are stable and fixed. So and that might come down to the individual's risk appetite as to how much of your money you put in each so you might want to put some into a high risk, potentially high return coin, as opposed to a stable coin, but that's going to stay where it is or maybe something that's going to have a lower risk profile. But it's a bit like putting money into shares although at the moment, it's more volatile, and it's less predictable, but given investment houses are moving money between shares and coins now and you can start to see how they balance out against each other. That's, I think, got to change and stabilize and provide more options for people going forward. But we need to get it in front of people so they can understand and work out for themselves what they want to do with this sort of capability.

MR: Now, given DB Results' extensive expertise in his field and having sat back and seen the transition and transformative nature of the applications that come through the government, how much confidence do we have in the government setting up these regulations? Will they be seeking input from industry or are they just going to try and get it done right on their own and adjusted it as they go?

PF: Yeah. I'm actually pleased to say I've seen that the government already sought input already and I've heard of many people have been asked to be consulted by the government to understand what crypto is, how these coins operate and how they can best roll out a solution or their own cryptocurrencies. I think there's been a lot of consultation going on, which is great. I mean, the government hasn't always had a great track record of delivery of all projects, I think it's been well publicized, but I think they've really put a lot of effort in Senate and a lot of focus and given its currency it really needs the right eyes on the right focus to make sure it works. But it's like anything new, it's going to have to be tested and improved. And once it's out there, the government will need to move with some agility and speed to make sure it is tested and works in the right context for all of us so that it will get picked up and used because it's new, this is changing the way we do some fundamental things that have been part of society for a long time. So there’s also probably got to be a bit of tolerance from the rest of the world as well in in adopting and there'll be a trial sort of settling period. But I've got high hopes that it will it'll go well.

MR: Well, it definitely sounds like there's an opportunity for potential for wide ranging and hopefully beneficial improvements for society. So Pete, thanks so much for your time.

PF: No worries. Thank you.