Comm Bank, ASIC force crypto into the mainstream
As the old adage goes, “If you can’t beat em, join em.” Well, that’s exactly what Commonwealth Bank (ASX: CBA) has done after it announced the offering of cryptocurrency services to its customers. CBA has attempted debanking exchanges, freezing bank accounts and blocking its customers from depositing money with cryptocurrency exchanges. It even went as far as describing those who dealt in cryptocurrency as a “security risk,” because the destination account has been used to facilitate payments to Bitcoins or similar virtual currency payment services. Now the bank wants in.
CBA has partnered with fintechs Gemini and Chainalysis to offer crypto services to its customers. It was only a matter of time before the bank jumped onboard after realising its customers were conducting cryptocurrency transactions elsewhere. CBA now wants to offer customers the ability to buy, sell and hold crypto assets, directly through the CommBank app.
These two partnerships will allow the bank to design a crypto exchange and custody service offered as a new feature in the app. The pilot is due in the next few weeks. The service will provide customers with ten selected crypto assets, including Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
CBA has some 6.5 million customers who are demanding access to crypto assets as an investment class and are already buying, selling and holding crypto assets through a variety of crypto exchanges. As quoted in the press, CEO Steve Vallas of Blockchain Australia said: “The confidence that this provides local digital-asset sector participants will be dwarfed by the impact that this signal sends around the world that Australia should be a destination for cryptocurrency and digital asset adoption.”
It’s inevitable now that the remaining three big banks will follow suit. And it’s great news for the Australian cryptocurrency community. Suddenly the country has gone from playing catch-up to now a leadership position globally with our largest bank. According to a report published by Chainalysis, Australia ranks 38th on its global crypto adoption index and 12th on its decentralised finance (DeFi) adoption index
Confidence in the space is rising with regulator ASIC in the background outlining regulatory ground rules for product issuers and market operators with the release of crypto-asset-related investment product guidance. Topics contained in the investment product guidance will cover good practice, admission and monitoring standards, safe custody of crypto-assets, pricing methodologies, disclosure and risk management.
This report follows on from ASIC’s rubber-stamping of cryptocurrency ETFs, allowing Bitcoin and Ethereum-backed investment funds to trade on the ASX and Chi-X. Today’s news is a clear indication that the banks are feeling ‘FOMO,’ and don’t want to be left behind with the banking sector run by tech firms, as opposed to traditional banks.