Australia’s largest bank has paused the launch of cryptocurrency trading through its app amid turmoil and uncertainty in the market.
Commonwealth Bank announced in November plans to allow its customers to buy and sell cryptocurrency through its app.
Under the plan, customers would be able to buy up to 10 crypto assets including bitcoin, Ethereum and Litecoin.
The bank had planned an initial pilot, before “progressively [rolling out] more features to more customers in 2022”.
However, Guardian Australia has confirmed the rollout is paused, with no time set on when it will resume.
Those who were on the initial pilot have not been able to continue trading crypto through the app.
The chief executive of the Commonwealth Bank, Matt Comyn, said the company was working on the feedback received from customers, but indicated more regulation would be needed before advancing to the next stage.
“As events of the last week have reinforced, it is clearly a very volatile sector that remains an enormous amount of interest. But alongside that volatility and awareness and I guess the scale, certainly globally, you can see there is a lot of interest from regulators and people thinking about the best way to regulate that,” he said in a tech briefing this week.
The federal Treasury is consulting on regulation around cryptocurrency, with submissions open until 27 May. Comyn indicated the government formed after the election would be focused on “how to most appropriately regulate the sector”.
“We want to continue to play a leading role in providing input into that and shaping the most appropriate regulatory outcome,” he said. “Our intention still, at this stage is to restart the pilot, but there is still a couple of things that we want to work through on a regulatory front to make sure that that is most appropriate.”
It is a tumultuous time for cryptocurrency. Stablecoin Terra collapsed this month, causing an effective crypto crash that wiped between 15% and 25% off the value of most major cryptocurrencies.
Dr Dimitrios Salampasis, a lecturer in fintech leadership and entrepreneurship at Swinburne University, said large incumbents such as CBA were scared about the potential reputational damage from association with crypto. He said it was about balancing risk, and CBA would keep working on it in the background to retain first-mover advantage.
“The cautionary tone is also a signal to investors, shareholders and ecosystem stakeholders, since the perceived inbound and outbound risk for CBA is probably higher after embarking on such a journey,” he said. “I do not believe that the project – at least for now – is stalled. But balancing risk, brand equity and regulatory clarity will be key so as to minimise disruption in CBA’s current business model.”
The crypto crash may also throw into question a recent $25m deal between cryptocurrency exchange platform Crypto.com and the Australian Football League announced in January. Under the five-year deal, Crypto.com will have exclusive naming rights for the AFL Score Review during the premiership and final series matches.
The AFL refused to comment on the deal, saying it doesn’t discuss commercial partnerships. A spokesperson for Crypto.com wouldn’t say whether the deal was paid in cash or cryptocurrency but said the company was still committed to the partnership.
“Crypto.com remains fully committed to its sports sponsorships. We are well-financed, and these are multiyear contracts, which will continue to play a crucial role in our mission to accelerate the world’s transition to cryptocurrency.”