If crypto is incorporated into Australia’s financial system, we will be lucky to avoid contagious collapse
In a recent opinion piece, economist John Quiggin warns that integrating cryptocurrencies into Australia's financial system could precipitate a systemic collapse. He argues that cryptocurrencies lack intrinsic value, rendering them susceptible to rapid devaluation if public confidence wanes. Quiggin draws parallels to the 2008 Global Financial Crisis, suggesting that, similar to the collapse of complex financial derivatives, widespread crypto adoption could destabilize traditional financial institutions. He cautions that as traditional institutions' exposure to crypto-assets increases, the potential for a significant financial downturn escalates. Quiggin advocates for maintaining a clear separation between the crypto sector and the traditional financial system to mitigate these risks.