Commonwealth Bank (CBA), one of the big four banks in Australia, announced on November 3, 2021, that it would offer cryptocurrency trading services to its customers. Many experts believe that this move will help to increase the legitimacy of the crypto sector in Australia.
Purchase Of Crypto Via Commonwealth Bank
According to the announcement, users of the bank can now buy and sell crypto directly via their banking app. It is the first move of its kind by one of the big four banks in Australia. To facilitate crypto trading, CBA, which is the largest bank in Australia, has partnered with the US Gemini exchange and Chainalysis, the crypto and blockchain analysis firms. This service will be available to all of the bank’s 6.5 million app users.
They plan to begin the pilot in the coming weeks. In 2022, they will progressively roll out more features. Initially, traders will have access to ten selected crypto coins, including Ethereum, Bitcoin, Litecoin, and Bitcoin Cash.
Why They Have Embraced Crypto
Previously, CBA had not been supportive of the crypto sector. The bank, along with other major banks in Australia, banned the use of credit cards to purchase crypto. On February 14, 2018, CBA announced that it had blocked all crypto purchases made using crypto. The announcement stated that they had decided due to the highly volatile nature of cryptocurrencies. However, customers were still allowed to purchase crypto using other means. The ban is still in place.
The bank said research on its customers found many had either expressed interest in crypto assets or were already trading crypto through exchanges. CBA CEO, Matt Comyn, added that customers had expressed concerns regarding some of the crypto services offered to them. He noted that these customers at times experienced friction when using third-party exchanges, risked being defrauded, and lacked trust. Consequently, they had seen an opportunity “to bring a trusted and secure experience” for their customers.
What Do Experts Think Of The Move?
During an interview with The Guardian, Dr. Dimitrios Salampasis, lecturer at Swinburne Business School, said that CBA was trying to get a first-mover advantage in the country. He noted that with CBA being the biggest bank in Australia, their move would change a lot. He added that it could help bolster legitimacy and harmonization to the sector. Additionally, it would help to minimize debanking, which had caused huge problems for crypto startups.
Debanking is a common practice in Australia, where banks refuse to offer their services to crypto and fintech startups. A senate committee report tabled in November 2021, found that numerous startups in the country had experienced debanking. The committee recommended that the government regulate the fintech sector to allow it to operate within the country. One of the companies affected by the practice is Bitcoin Bane, a crypto exchange. It shared its experience with the committee on how it had been rejected by numerous financial institutions in the nation.
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