- In Australia, the CBA is the first bank to offer its customers an opportunity to hold, sell and purchase crypto assets via its app.
- According to a YouGov research, almost four million Australians are more inclined to invest in cryptos in the coming year.
- According to a CBA research, many customers desire to invest in crypto assets and are currently trading them on various crypto exchanges.
In Australia, crypto has boomed! It is a moment to rejoice for all crypto fanatics in Australia.
Yes, there is a risk involved with cryptocurrency investment. However, the Australian government failed to resist the unwavering support of the young generation for cryptos.
Last week saw Australia's securities watchdog, the Australian Securities and Investments Commission (ASIC), giving green the signal to spot Bitcoin and Ethereum exchange-traded funds (ETFs).
Another huge payoff for Australian crypto investors was when the Commonwealth Bank of Australia (ASX:CBA) comes out supporting crypto trading, signalling a historic shift in the sector!
Several nations are still in early stages of crypto trading, awaiting governmental clearances. Previously, most banks declined to work with crypto exchanges. In the United States and Europe, just a few banks provide crypto trading services. With the CBA's nod, Australia has now joined the race.
In Australia, what is the current crypto trend?
Despite warnings from regulators that individuals may lose all their cash, cryptocurrency is gaining traction in the mainstream.
Cryptos made headlines for various reasons, including environmental damage, unpredictably fluctuating prices, and criminals using them to conceal unlawful activities like money laundering. All of these, however, couldn’t stop Australians from dabbling in the enigmatic crypto world.
Surprisingly, over two-thirds of the four million Australians are fascinated by cryptocurrencies, considering them as a feasible alternative.
Bitcoin Cash, Ethereum, Dogecoin, and Cardano are other popular cryptos among Australian investors. Furthermore, with about 9% of the population owning BTC, it is the most widely used crypto in Australia.
According to a YouGov research, almost four million Australians are more inclined to invest in cryptos in the coming year.
Australians are in full swing regarding investment in cryptocurrencies. Now it's up to the government to start making cryptos more accessible to investors.
Is crypto regulated in Australia?
Australia's anti-money laundering agency, The Australian Transaction Reports and Analysis Centre (AUSTRAC), currently mandates all crypto exchanges in the nation to get registered with them.
Moreover, the Australian Taxation Office has stated that crypto gains were subject to the same tax regulations as shares and must be reported to the ATO.
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What drove CBA to embrace cryptocurrency
It was getting increasingly difficult to ignore CBA clients' current crypto craze. According to a CBA research, many customers desire to invest in crypto assets and are currently trading them on various crypto exchanges. CBA estimates that approximately 500,000 of its customers are engaged in crypto trading based on accounts data.
Therefore, CBA took the initiative to embrace cryptocurrency. It collaborates with Gemini, one of the world's leading regulated crypto exchanges, and Chainalysis, a major blockchain analysis firm. These collaborations enable the bank to develop a crypto exchange and custody service that will be accessible to users via a new feature in the app.
According to CBA CEO Matt Comyn, customers' increasing demand for digital currencies is creating both possibilities and difficulties for the financial services sector.
In a few weeks, CBA would invite 2,000 customers to participate in a pilot programme where they could trade cryptos by using the CBA app.
Furthermore, the bank would initially support 10 of the world's most prominent digital currencies, including Bitcoin, Litecoin, Ethereum, and Bitcoin Cash. Unfortunately, parody-turned-crypto Dogecoin will be excluded.
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What are the crypto trading restrictions on the CBA app?
Crypto trading on the CBA app would be subject to various restrictions. For example, customers will not be able to send cryptos to other individuals; instead, all transactions will involve selling or purchasing coins in return for actual money.
The CBA must make efforts to limit its services since crypto transfers are difficult to track and lure cyber criminals. In addition, the bank is having a challenging time complying with anti-money laundering and counter-terrorism finance regulations. So, in order to deal with all of these concerns, CBA restricted its crypto services.
Furthermore, all crypto transactions would be routed through customers’ accounts, permitting the bank to monitor everything.
Is this the beginning of a new era for Australian banks?
The CBA is playing a key role in promoting the adoption of cryptos by offering a platform for customers to trade cryptocurrencies.
With its crypto offering, CBA has joined other fintechs such as Revolut, PayPal Holdings, and Square, which are offering crypto services.
The move, however, differentiates CBA from its three peers - Australia and New Zealand Banking Group Ltd (ASX:ANZ), Westpac Banking Corp (ASX:WBC) and National Australia Bank Limited (ASX:NAB). In September, they drew criticism for declining to work with crypto providers.
It will be fascinating to observe how CBA's other competitors react to its entry into crypto services. It's unclear whether they'll begin providing such services in the future. However, one thing seems inevitable; crypto trading will only grow bigger in the future and demand for crypto services will surge.
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Crypto aficionados applauded the CBA's decision as a clear hint that crypto assets are becoming more mainstream. It is a wise approach to entice young customers and keep them engaged with the CBA app. with increased demand; cryptocurrency has a bright future in Australia.
There are many arguments against cryptos, yet the bank's adoption of cryptos to cater to its crypto investors cannot be overlooked.
Furthermore, the action compels Australian financial regulators to focus immediately on the volatile US$2-trillion crypto trading market. Many claims it has no real value and relies on consumers' complete reliance on various forms of software.
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