DeFi is here to stay says Australian Minister Jane Hume

In a remarkable continuation of mainstream acknowledgement, decentralised finance was addressed by Senator Jane Hume in her latest speech. 

Senator Hume addresses DeFi

In her address to the Australian Financial Review Super & Wealth Summit in Sydney, Senator Jane Home declared that she expects decentralised finance to stay around for a long time. In her congratulatory remarks to the AFR’s 70-year anniversary, Senator Hume addressed several topics such as superannuation reforms, the Retirement Income Covenant and trustee fee charging. She also talked about the Compensation Scheme of Last Resort, but the last part of her speech was undoubtedly the most intriguing for crypto investors. 

Senator Hume called DeFi “an emerging and rapidly evolving area of financial technology that presents huge opportunities” and quoted the recent Senate Committee report’s findings that one in six Australians are investing in crypto. She acknowledged that crypto has “captured hearts and minds” and that it was not going away anytime soon.

Commending the financial industry for embracing innovation and developments in the crypto space, she also touched upon the recent announcement by the Commonwealth Bank of Australia to allow its customers to buy and use crypto via its app. In a direct rebuttal of the words of J.P.Morgan’s CEO Jamie Dimon, who famously called crypto “a fad,” Senator Hume said that it was precisely not one. That also contradicted the statement by Tony Richards, the Reserve Bank of Australia’s outgoing Head of Policy, who called crypto a fad as recently as last week. 

However, Hume also stressed that the government would need to tread cautiously, albeit not fearfully, and recommended not to get left behind on possibly ground-breaking innovation. She drew indirect comparisons to the iPhone, the internet, and emails and recommended looking at crypto just like at any other potentially disruptive technology: an opportunity that Australia mustn’t be left behind on because of fear. 

DeFi – the future of finance or dangerous territory?

The speech by Senator Hume is an extraordinary contradiction to statements made by her colleague Mr.Richards and a testament to how controversial decentralised finance really is. While some claim that DeFi could spell a revolution far beyond payments and overhaul the finance industry, others see it as an insider’s playground that is rife with fraud and other criminal behaviour.

One example of this is Squid Game, a meme coin named after the Netflix hit that turned into a massive rug pull, a way for the unknown developers to abscond with the investments of ill-informed individuals. And while Squid Game was the most high-profile case, it was far from the only one. Decentralised finance has a history of massive rug pulls that cast doubt on how well-suited the technology really is to accommodate everyday financial needs. 

So while Senator Hume should be lauded for her positive take on DeFi, she will face an uphill battle against its critics in the face of evidence that it will take the sector significant time to mature. DeFi is here to stay, but it will need to change to be respected. 

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