A recent article published by the ABC, titled “Rise of cryptocurrency loans in Australia spark concerns about financial ‘contagion'”, paints a misleading and politically charged picture of crypto-backed lending. While it attempts to frame the issue as a looming financial risk, a closer look reveals the classic fear-driven narrative that legacy media often deploys against emerging financial technologies.
A Biased Premise Disguised as Journalism
Right from the headline, the article primes readers with a sense of impending doom by invoking the word contagion, a term typically associated with systemic financial crises. This phrasing is designed to instill fear, drawing parallels to the 2008 financial collapse, despite offering no substantive evidence that crypto loans pose a systemic threat to Australia’s financial system.
The structure of the article follows a familiar pattern: introduce a new financial mechanism, selectively quote critics who call it “bonkers banking,” highlight extreme cases of loss, and then tie it all together with vague warnings from economists. Missing, however, is a balanced exploration of the potential benefits and safeguards in place for crypto-backed lending.
Cherry-Picked Risks, Ignoring Broader Context
While the article does acknowledge that these lending practices are legal and that the lenders involved are licensed, it quickly pivots to worst-case scenarios. The example of a borrower losing their Bitcoin in the Celsius collapse is presented without noting that traditional banks have a long history of failing, often with taxpayer bailouts. The article also glosses over the fact that crypto-collateralized loans often have significantly lower default rates compared to traditional unsecured loans, since borrowers must maintain a healthy loan-to-value ratio or risk liquidation.
Moreover, by focusing on the volatility of Bitcoin and Ethereum, the article implies that these assets are uniquely unstable and therefore unsuitable for lending. Yet, real estate—historically leveraged for loans—is also subject to market fluctuations, and margin calls in traditional finance exist just as they do in crypto markets. Where is the ABC’s concern over mortgage-backed lending in a high-interest-rate environment?
A Convenient Political Tie-In
Adding to the article’s misleading framing is an unnecessary reference to Donald Trump’s pro-crypto stance, which is presented as “crazy” by some experts and “something great” by others. This diversion feels like a thinly veiled attempt to politicize crypto adoption and frame it as a right-wing phenomenon rather than an innovative financial sector that spans political ideologies. The inclusion of Trump in an article about Australian crypto loans serves no journalistic purpose beyond stoking partisan reactions.
The Real Reason for Crypto Skepticism in Legacy Media
One must question the motive behind such an alarmist piece. Legacy media institutions have long struggled with the rise of independent, decentralized financial systems, which threaten the traditional gatekeeping structures they’ve supported. Unlike the financial institutions that benefit from government protections and central bank backing, crypto markets operate outside the direct control of policymakers, a fact that makes regulators and their media allies uneasy.
The ABC’s portrayal of crypto-backed lending as a reckless gamble is an extension of the broader narrative that seeks to discredit digital assets in favor of legacy financial structures. Had the article presented a more neutral stance—highlighting both risks and opportunities—it would have served the public far better. Instead, it falls into the trap of sensationalism, selective reporting, and politically motivated framing.
Is crypto-backed lending risky? Of course—just like any form of leveraged finance. But to suggest that it presents an existential “contagion” risk to Australia’s financial stability is misleading at best and disingenuous at worst. Rather than fueling fear and perpetuating outdated narratives, responsible journalism should focus on education, balanced analysis, and the reality that financial innovation often outpaces regulation—not because it is dangerous, but because established systems resist change.
At The Guv, we believe that truth matters more than narrative. The ABC’s slanted coverage of cryptocurrency lending deserves scrutiny, just like the financial institutions it so readily defends.