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“It’s still a very volatile investment, so any allocation exposure we make to cryptocurrencies is likely to be part of our diversified portfolio,” said Rest Super CIO Andrew Lill on Tuesday.
Rest Super, an Australian superannuation company, is expected to become the country’s first retirement fund to invest in cryptocurrency.
The fund manages around $46.8 billion in assets and has approximately 1.8 million members. All employees are required to participate in superannuation, which is similar to a 401k or Individual Retirement Account in the United States. Until now, the $2.4 trillion industry has been very wary about cryptocurrency.
During Rest Super’s annual general meeting on Tuesday, the firm’s chief investment officer, Andrew Lill, told members that the company sees digital assets as an “important part” of its portfolio moving forward but will proceed “carefully and cautiously,” noting that:
“It’s still a very volatile investment, so any allocation exposure we make to cryptocurrencies is likely to be part of our diversified portfolio as initially a fairly small allocation that may, over time, build.”
Lill went on to add his view that offering members exposure to crypto and blockchain tech could provide a “stable source of value” amid a time in which investors are flocking to crypto as a hedge against fiat-based inflation.
“I do think that, in an era of inflation, it could be a potentially good place to invest,” he said.
Following the CIO’s speech, a Rest spokesperson clarified in a statement that it is “certainly considering cryptocurrencies as a way to diversify our members’ retirement savings [but] will not be investing in the immediate future.”
“We are currently conducting extensive research into the asset class prior to making any decisions,” the spokesperson said. “We are also considering the security and regulatory aspects of investing in this class.”
The comments are in contrast to those from Australian Super this week, with the CEO of the $167-billion fund, Paul Schroder, stating on Monday that “we don’t see cryptocurrency as investible for our members.”
Last month, it was reported that state-owned investment fund Queensland Investment Corporation (QIC) was looking at gaining crypto exposure. However, the firm told Business Insider this week that the reports were “incorrectly implied” and played down any digital asset-adoption moves.
QIC head of currency Stuart Simmons also said while he expects superannuation funds to adopt crypto in the future, it’s “probably going to represent a trickle, rather than a flood.”
Following the development of extensive regulatory proposals by a Senate committee in October as part of a push to develop Australia into the next crypto hub, and Commonwealth Bank of Australia’s (CBA) move to provide crypto trading via its banking app earlier this month, the discussion comes at a potentially bullish time for the Australian crypto market.
While the country waits to see which of the country’s main traditional financial institutions would be the next to embrace cryptocurrency, CBA CEO Matt Comyn remarked earlier this week that the bank was more motivated by FOMO than by concerns about the risks connected with digital assets.
“We see risks in participating, but we see bigger risks in not participating,” he said.