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Highlights
- Users of the CommBank app will soon be able to buy and sell cryptos, with the initial rollout beginning in the coming weeks with the CBA adding more features in 2022
- In September, CBA was criticised for refusing to do business with crypto-related companies due to the volatile and unregulated nature of the cryptocurrency space
- CBA’s latest move comes after ASIC on Friday released guidance pertaining to crypto-related products, providing practical examples of how existing crypto regulatory obligations may be met
The Commonwealth Bank of Australia (ASX:CBA) has surprised many by announcing it will be offering cryptocurrency services to retail clients.
Australia’s largest bank announced on Wednesday that it would be making the addition to its existing CommBank app, doing a complete 180 on its previous stance where it had refused to do any business with digital currency providers.
The change will start with a pilot later this year where CBA will offer ten cryptos to its 6.4 million app users in partnership with New York-based crypto exchange - Gemini Trust Company.
Users of the CommBank app will be able to buy and sell those ten cryptos, with the initial rollout beginning in the coming weeks; the CBA will be adding more features in 2022.
A Curious Turnaround
The news of CBA becoming the first bank in Australia to offer crypto services to its customers comes as somewhat of a surprise to some crypto businesses who have claimed that CBA had previously refused to do business with them due to the volatile and unregulated nature of the cryptocurrency space.
Michaela Juric, who built her business, “Bitcoin Babe”, from her bedroom in Western Sydney into a digital currency empire, claimed in September that the CBA, along with other Australian banks, had “debanked” her. “Debanking” is a term which describes when banks ban a customer from doing business with them.
With regards to crypto businesses, banks claim they practice “debanking” largely due to the unregulated nature of the crypto market as well as believing that crypto money could be used for illegal activities such as money laundering and even terrorism.
In September, CBA released a statement to Australia as a Technology and Financial Centre (ATFC) Senate inquiry explaining that the debanking process was a necessary step to mitigate and manage risk.
What Has Changed?
Commonwealth Bank Chief Executive Matt Comyn has addressed the bank’s sudden change of perception towards crypto, saying in a statement that in September, CBA was still studying the crypto space.
Comyn further added that CBA’s decision had been driven by a growing demand for the service, as well as by the criticism it faced in September regarding the practice of “debanking”
Are The Current Crypto Regulations Enough?
The cryptocurrency space in Australia remains largely unregulated, to the point where financial advisers cannot legally recommend any digital assets to their clients.
Meanwhile, on Friday, the Australian financial regulator, ASIC, released guidance pertaining to crypto-related products, providing practical examples of how existing crypto regulatory obligations may be met.
Moreover, the practical examples offered by ASIC also display how these regulations can be met while upholding Australia's fair, orderly and transparent markets.
The decision by CBA to offer crypto services is a huge step forward for the crypto industry as it moves increasingly into the mainstream.
