Australian Retail Superannuation Trust (Rest Super) is set to become the first Australian retirement fund to invest in cryptocurrencies. In a move that is likely to trigger a wave of institutional investments in digital currencies in the country, the retirement fund intends to enter the market with a fairly small portion of its total assets.
Rest Super has more than $46.8 billion worth of assets under management (AUM) on behalf of its 1.8 million members. Until now, the Australian superannuation industry has been skeptical about digital currency investments.
Rest Super confirmed the intentions to add crypto during its annual general meeting. The fund’s chief investment officer, Andrew Lill informed the members that the company considers digital assets an important part of its portfolio going into the future. At the same time, the company understands cryptocurrencies remain a “very volatile investment”. Therefore, it will proceed carefully and cautiously, with any cryptocurrency allocation being part of a diverse portfolio strategy that might build over time.
Lill also added that investments in digital currencies need to be thoroughly examined before execution. The regulatory uncertainty within the crypto sector also comes as an added challenge.
After the CIO’s speech, one of the organisation’s spokespeople put out a statement clarifying that while the fund is considering digital currencies investments as a way to diversify members’ retirement savings, it won’t be investing in the immediate future.
The fund is currently conducting extensive research before making any investment decisions. They are also looking into the regulatory and security concerns that come with investing in digital currencies.
Other Australian major funds’ approaches to crypto
Rest Super is not the only major Australian fund to give its stance on digital currencies. The state-owned Queensland Investment Corporation (QIC) was one of the earlier reported funds to be considering cryptocurrency investments.
However, the fund later clarified that the reports were “incorrectly implied” and downplayed their digital currency adoption plans. QIC head of currency, Stuart Simons has since explained that while he expects the fund to invest in crypto in the long run, “it will represent a trickle, not a flood”.
The crypto adoption consideration among the Australian superannuation funds comes at the best time. It follows the increased crypto debate in government circles. A Senate committee has been developing extensive cryptocurrency regulatory proposals that may see Australia become a crypto hub.
As crypto becomes a mainstream investment option, the Australian Securities and Investment Commission (ASIC) is warning investors to move with caution. ASIC’s Joe Longo is of the view that consumers investing in cryptocurrencies should move with great caution, following the maxim of “don’t put all your eggs in one basket.”
Last month, ASIC released a new information sheet on cryptocurrencies and ETFs to show how market participants could meet their regulatory obligations. At the moment ASIC only accepts crypto-linked investments which meet its set of criteria.
While Rest Super crypto investment might kick off a scramble by institutional investors into the digital currencies investments, there is a need for caution and clearer regulatory provisions.