Australian Super Funds Are Still Vigilant for Crypto Even After Interest Surge of APAC Family Office

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Many family offices in Asia-Pacific are turning to cryptocurrency investments, but Australian super funds are still mainly avoiding the asset class.

According to a new report from Singapore-based Family Office Insights, 46% of APAC family offices surveyed said they had invested in cryptocurrency, with 56% saying they were interested in doing so in the future.

However, just 2% of Australian superannuation (pension) funds said they had invested in cryptocurrency, and only 7% said they were considering it.

The report’s authors attribute this difference to a “lack of regulatory clarity” around cryptocurrency in Australia.

“Family offices are generally more nimble than institutional investors and are therefore able to make investment decisions more quickly,” the report said.

“They are also often willing to take on more risk than traditional institutional investors.”

The report found that family offices in APAC were most interested in investing in cryptocurrency for its potential growth (66%), followed by its hedge against inflation (52%).

On the other hand, Australian super funds cited regulatory concerns (50%) and a lack of understanding of the asset class (41%) as their main deterrents to investment.

While the Australian Securities and Investments Commission has released guidance on initial coin offerings (ICOs) and cryptocurrency investments, the regulator still needs to provide clear regulations around the space.

This contrasts with jurisdictions like Singapore, which have taken a more proactive approach to regulating cryptocurrency.

The Monetary Authority of Singapore has released rules around ICOs, and earlier this year, it launched a regulatory sandbox for crypto exchanges.

“The MAS’ progressive attitude towards regulation has seen Singapore emerge as a hub for cryptocurrency and blockchain innovation in Asia-Pacific,” the report said.

“This contrasts to Australia, where the regulatory environment is still unclear.”

The report’s authors said that Australian super funds would likely need more “regulatory clarity” before they would feel comfortable investing in cryptocurrency.

In the meantime, they said, family offices would likely continue to be the most active investors in the space.

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