The Commonwealth Bank will allow its customers to buy and sell cryptocurrency through its app, in the first move of its kind by a major Australian bank.
Australia’s largest bank announced on Wednesday it had partnered with US-based crypto exchange Gemini and blockchain analysis firm Chainalysis to offer the service to its 6.5m CommBank app users.
Customers will be able to buy up to 10 crypto assets including bitcoin, Ethereum and Litecoin.
The bank will conduct a pilot in the next few weeks, ahead of a wider launch in 2022.
“We believe we can play an important role in crypto to address what’s clearly a growing customer need and provide capability, security and confidence in a crypto trading platform,” CBA’s chief executive Matt Comyn said in a statement.
The bank said research on its customers found many had either expressed interest in crypto assets, or were already trading crypto through exchanges.
“Customers have expressed concern regarding some of the crypto services in the market today, including the friction of using third party exchanges, the risk of fraud, and the lack of trust in some new providers. This is why we see this as an opportunity to bring a trusted and secure experience for our customers,” Comyn said.
Dr Dimitrios Salampasis, a lecturer of fintech leadership and entrepreneurship at Swinburne Business School, said he was not surprised CBA had entered the cryptocurrency field.
He said the bank was trying to get first mover advantage in Australia, and hoped it would bring more legitimacy to the cryptocurrency space.
“Having this coming from a systemic and the biggest bank in Australia, it’s definitely a move that will change a lot,” he said.
“And it will hopefully bring legitimacy, bring further harmonisation, push further regulation and also minimise debanking, which has been a massive pain for all cryptocurrency startups in particular.”
Debanking is where financial institutions refuse to offer services to businesses in Australia.
A Senate select committee report on fintech services in Australia, tabled this month, cited several cryto businesses that had been rejected by dozens of financial institutions in Australia, such as the exchange Bitcoin Babe.
The committee, chaired by Liberal senator Andrew Bragg, recommended the government regulate the sector to allow it to fully operate in Australia, including a market licensing regime for digital currency exchanges, and for the government to develop a clear process for businesses to deal with debanking.
Salampasis said the committee’s report, along with CBA’s gradual move into the sector, would likely foster regulation of cryptocurrency in Australia.
“There has to be regulation, there has to be provisions, especially in relation to custody, especially in relation to licensing,” he said.
“I do believe that Australia has a once-in-a-lifetime opportunity to become a leader in the space and really drive a complete regulatory framework around cryptocurrencies.”
Bragg welcomed the announcement from CBA.
“For too long, banks have cast aside cryptocurrency as an illegitimate fringe pursuit. I am pleased the tide is turning, as digital assets are mainstreamed,” he said.
“Now banks are adopting cryptocurrency, they should stop ‘debanking’ hardworking Australians.”
CBA told the committee that it “does not have a policy” around debanking due to “competitive or market factors” but when making a decision on lending to new customers, “we take a range of risk considerations into account including the terms and conditions of any loan documentation and possible security provisions provided.”
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