A Turnbull government frontbencher has said the Coalition is not afraid of getting into business with companies in the cryptocurrency world after it made a multimillion-dollar taxpayer funded investment in a company that uses bitcoin technology.
In an unprecedented foray into cryptocurrencies, Angus Taylor, the Assistant Minister for Cities and Digital Transformation, awarded the government’s second largest grant in its Smart Cities and Suburbs program to the first Australian company to list itself on digital currency exchanges on Friday.
The price of the company’s tokens doubled from 46 US cents to 79 US cents following the announcement, driven by trades on the increasing legitimacy of the ascendant market through federal government investment.
The $8.6 million push, which will combine $2.6 million in federal government grants with further funding from local council, will go towards a project run by Perth-based company Power Ledger in partnership with Curtin University, Murdoch University and the CSIRO.
In October, the energy tech start-up made Australian history with the nation’s first initial coin offering [initial public offering] through the Ethereum cryptocurrency network after raising $18.9 million in capital in the lead up to its launch.
In the past 24 hours more than $63 million worth of Power Ledger coins have been exchanged, while the price dropped off its peak to 63 US cents by 11am AEDST Wednesday.
The company has developed the technology behind Bitcoin – blockchain – to create a digital emissions trading scheme in Fremantle that it hopes will expand elsewhere.
Blockchain works as an anonymous, secure data diary, recording all transactions that take place digitally.
Power Ledger uses data to track household data of energy consumption and generation, allowing neighbours to trade excess energy or shortages with each other automatically, as they would shares on stockmarket.
“I’ve always believed in the enormous potential of distributed energy generation,” Mr Taylor said. “It’s not just emissions reduction but is also a way of taking big costs out of the system and solving shortages.”
The minister said the government’s investment across the Smart Cities program was seed capital for bold projects as part of its digital transformation agenda.
“We have to walk the walk,” he said.
“I can never be sure of which technologies are going to be most successful but there are some pretty sure bets among this group.”
Mr Taylor said there was still a lot to learn about companies in the cryptocurrency space and the blockchain technology that underpins many of them.
“There is inevitably risk with the technology but the federal government’s Digital Transformation Agency and CSIRO’s Data 61are both looking for applications for it,” he said.
“I’ve started more than half a dozen companies myself, you raise money anyway you can and if we can help small companies grow by being a customer to them then that is the most powerful way we can have an impact.”
On Wednesday, Bitcoin hit another record high of $US8339 in trading.
The market shrugged off a 5.4 per cent drop after $41 million worth of Tether, another cryptocurrency, was hacked.