🌞 Earlywork #62: Why Australia Could Become a Global Crypto Capital

The 4 biggest factors behind the case for Australia as a regional Web3 hub for APAC

Mar 22

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In the space of 200 years, Australia has gone from a convict colony to a regional financial powerhouse, home to over a dozen unicorns including Canva, SafetyCulture, Airwallex, and home to 5 of the 11 most liveable cities in the world.

So as we look towards the next wave of innovation, could Australia be poised to be one of the world’s crypto capitals?

With the news yesterday of FTX, the world’s fastest-growing crypto exchange, launching a dedicated market & team in Australia, it’s a question that will begin to sound less silly over time.

Not just a hotbed for Bored Ape NFT knock-offs, Australia is emerging as a regional APAC hub for cultivating the next generation of transformational Web3 startups.

We’re home to world-leading Web3 projects including:

Immutable: The fastest unicorn in Australian history, building an open, decentralized ecosystem for NFT trading backed by Ethereum
Synthetix: A synthetic asset trading platform with $500M in value locked up, offering derivatives that give exposure to real-world assets on the blockchain
Illuvium: An open-world RPG where users fight for Ethereum, backed by a token worth over $5B, which recently nabbed a feature in the AFR

And local early-stage projects are booming, including ARCx, Block Earner, CryptoTaxCalculator & Lyra Finance.

But do a few early wins translate into an ecosystem built for Web3 startup success?

Here are the 4 biggest reasons why we (Dan, Abhi, Sean, Max) think so…

#1: We have a strong backbone in traditional finance 🏦

It’s no mistake that Australian clocks are in trading offices all around the world.

The Australian financial services market was worth $10.90 trillion in 2020/21, which is 13% of our entire economy and a bigger slice of the pie than the tech industry.

Despite having only 0.3% of the world’s people, Australia has 1.6% of the global economy.

But a new financial system is coming…

Over the last 11 years, the ASX 200 averaged returns of ~9%.

In the same period, Ethereum’s price has increased more than 8000x since its initial coin offering (ICO).

Enter Decentralised Finance (DeFi): A world where people wear anything, say what they want and own more of what they make.

To the cautious ear, that almost sounds like propaganda recruiting financiers for some get-rich-quick scheme.

But given the incredible growth of Aussie Web3 startups, with an open, flexible & casual workplace culture more like that of tech than financial services, the allure is flipping traditional talent.

From investment banker to token advisor, stock market to coin market, here are six senior bankers who made the jump to Web3.

Early believers are now reaping real-world rewards, further strengthening the pull factor here.

Kain Warwick, who founded Synthetix in 2016, joined the rich list at just 40 and bought a house for $16 million in Tamarama.

At the same time, bitcoin trader and prominent options trader Toby Allen, Head of Trading APAC at Akuna Capital, bought a house for $13 million in Palm Beach.

Should Web3 be more than a flash in the pan, the next generation of top finance talent may entirely eschew investment banks, private equity firms or hedge funds, and instead dive deep into the world of DeFi.

If so, our strength in financial talent makes us well primed for a ‘great finance migration’.

#2: We’re a world leader in fintech regulation 👮

Over the last decade, we’ve been at the forefront of fintech innovation with a proliferation of neobanks and BNPLs.

This wave has been made possible by strong fiscal and regulatory support from the government, with regulators willing to issue banking licenses to fintechs startups.

In the same vein, Australia has been relatively friendly and stable in its views on cryptocurrencies.

As a result, a swathe of exchanges such as Coinjar, Coinspot, Swyftx, BTC Markets, and Independent Reserve have sprung up and gone-head-to-head to acquire customers locally.

In response to the growing threat of crypto scams, Treasurer Josh Frydenberg stated his intentions in December 2021 to take cryptocurrencies and digital assets “out of the shadows” and into a “world-leading” regulatory framework.

Since then, we’ve seen a host of legal developments towards legitimising decentralised finance, giving confidence to Web3 startups looking to launch in Australia and local users of Web3 technology alike.

Most notably, the Federal government is on its way to establishing a market licence ‘badge of approval’ regime for crypto exchanges, allowing “Australians [to] invest in crypto assets safely and securely.”

As a part of this, Australia will be introducing requirements such as breach reporting obligations, compliance with anti-money laundering laws and a strategy on how to classify crypto assets.

Jane Hume, the Minister for Digital Economy, sums up the Government’s approach well here:

“[The] government can’t guarantee your crypto any more than it can guarantee a painting or a share in a company, and nor should it…”

”…but we can make sure Australian exchanges, custodians and brokers -- Australian players in the crypto ecosystem -- work within a regulatory framework that is better, safer and more secure.”

Alongside this, the Reserve Bank of Australia, CommBank and NAB have collectively undertaken a research report called Project Atom that involves creating a wholesale form of central bank digital currency (CBDC) using distributed ledger technology (DLT).

There aren’t many countries exploring blockchain at the heart of their financial system quite like this.

Though Australia has a long way to go on crypto regulation on taxation & investor safeguards, there are positive early signs for those looking to build the next generation of Web3 startups here.

#3: Location Location Location 🏝

There’s a lot of hype about the Metaverse, but at the end of the day, we still live in the Realverse.

Okay, maybe our photo choices were a biiiiit cheeky, but when the workday is done, you close your 10 Opensea tabs on Chrome, and you go outside, a city like Sydney is a pretty darn nice place to live.

By comparison, Silicon Valley, currently the world’s leading tech hub, is notorious for its major liveability issues from strained public infrastructure, homeless epidemics and rising crime.

Unlike Web2 tech companies, many Web3 projects are ‘remote first’.

With people increasingly less tied to location-based employment opportunities, many are placing a greater weighting on geographical & cultural factors, with the beaches of Miami and mountains of Denver pulling in significant VC crypto investments in the US landscape

But zooming out globally, Australia has 5 out of the world’s 11 most liveable cities (Adelaide, Perth, Melbourne, Brisbane, Sydney).

In attracting Web3 talent who don’t have to work in offices, we’ve got a strong competitive advantage because hey, we’re a nice place to live.

Immutable gets it.

Take a look at their website, and Australia’s leading crypto startup intentionally uses the brand of Sydney as a magnet for top international talent, and there is no reason that smaller Australian Web3 startups couldn’t do the same thing.

#4: We have growing government & industry support to create & source top talent 🌟

Australia’s Web3 landscape has a lot of the right pieces in place, but our local ecosystem has a notorious ‘tech talent shortage’ that could hold us back.

To combat this, the Global Talent Program, launched in November 2019, is a visa program offered by the Federal government to secure international tech talent.

More than 500 companies have nominated migrants in order to fast track their visas into the country, and more than 9,500 have been into the country through the program.

But to be a global crypto capital, we need to cultivate a local training ground for the next generation of tech talent.

As a step in the right direction, the newly-formed, government-backed Tech Council of Australia is building a Digital Employment Forum alongside major tech employers and universities to identify tech talent gaps in the economy and train students to fill those gaps.

And in the Web3 world, we’re already beginning to see the talent flywheel spin, with ex-Immutable employee Kerman Kohli starting ARCx, and the ex-Synthetix Head of Product, Charlie Karaboga, starting Block Earner.

Whereas it took a decade to see this pattern with ex-Atlassian and ex-Canva founders, it looks like the Web3 operator to founder pipeline is happening much faster.

Summing it up

So we have the traditional finance strength, there are early signs of regulatory support, we’re a pretty nice place to live, and there are promising opportunities to attract & build the talent needed. All the ingredients are coming together.

Through the Earlywork community, we’ve seen more entrepreneurs taking the plunge on their own Web3 projects, and more tech talent shifting from traditional software to work for companies like Immutable.

Combined with more international talent, this leads us to believe that Australia is only getting started in its quest to become one of the crypto capitals of the world.

Probably nothing, right?

You can follow more of Abhi’s writing at Superfluid + check out his Web3 DAO for builders across APAC at DAO Under.

You can follow more of Sean’s writing on Medium

You can check out more of Max’s writing on his personal blog + check out his careers newsletter & community, Next Chapter

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📚 Trending Topics

Our favourite reads and resources being discussed in the Earlywork community.

Thoughts on Ed-Tech: A writeup from Square Peg on the gaps in the ANZ edtech ecosystem.
Australian Unicorns: A clean website showcasing Australia’s biggest startups from Earlyworker Felix Harvey
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🐝 💼 Buzzworthy Gigs

🌳 Associate Software Engineer @ Cecil

Cecil is a climatetech platform that brings together project data, workflows & stakeholders into one place to unlock insights and streamline the restoration of natural ecosystems

The Cecil crew are seeking a detail-oriented and highly driven Associate Software Engineer to work closely with designers in co-creating product from the ground up and solving real customer problems.

If you're an entrepreneur at heart, have an interest in growth & retention, and have experience related to the environment and/or project management software, you'll be well placed to apply!

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🌲 Community & Programs Manager @ AirTree

AirTree is a venture capital firm with a mission to back the most ambitious Australian and Kiwi founders building the iconic technology companies of tomorrow, right from the start, including Canva, Linktree, Who Gives a Crap, Eucalyptus & Immutable.

The AirTree team are looking for a Community & Programs Manager to expand AirTree’s flagship programs and networks that empower the next generation of startup founders, teams and angel investors.

If you love bringing people together, you can get people excited about being a part of a community, you are a self-starter, and have experience across community, program, content, project, or events management, shoot over an application!

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1️⃣ 🕐 💪 One Minute Hustle

We are back once again with One Minute Hustle, a bite-sized interview with an emerging Australian young startup founder.

This week, let’s get inside the noggin of a young founder putting the spotlight on startups raising their first round of funding…

Rachel Huang, Co-Founder @ The Network Loop

⚙️ What are you working on?

Building an entertainment show featuring startup pitches to fund startups through our equity crowdfunding platform. We're unlocking capital from everyday investors to invest in the companies of our future.

🌱 How’d you get started?

I previously started a renewable energy hardware tech company and ran into the problem of not being able to raise money because I didn't have a patent, but also couldn't apply for a patent because I didn't have the funding.

I don't want this to happen to other startups working on world-changing ideas, and I also want to help everyday investors invest in things that will make the world better.

🤔 Why do you do what you do?

My biggest motivation in life is to help people, and help the world. In the process I'd also like to become the best version of myself, so I keep venturing outside my comfort zone in hope of making good startups known to more everyday investors.

Keen to share your story, or know a young startup founder or operator we should feature next?

Share your deets below or send to your mate, and we’ll get in touch!

I'm interested!

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