Today’s announcement from Australia’s largest bank that it will offer crypto exchange services to customers will result in greater adoption of digital assets, according to one industry leader who believes the move will create a “more circular ecosystem for digital asset investors”.
The widely reported news that Commonwealth Bank (ASX: CBA) will become the country’s first bank to offer customers the ability to buy, sell and hold crypto assets directly through the CommBank app is a major step toward the further legitimisation of digital assets such as Bitcoin, Ethereum and more.
The move has seen CBA partner with crypto exchange Gemini and blockchain analysis firm Chainalysis, with the two partners having designed a crypto exchange and custody service for CommBank that will be offered to the Big Four bank’s more than 17 million customers.
The pilot will start in the coming weeks and CBA intends to progressively rollout more features to customers in 2022. The bank will provide customers with access to up to ten selected crypto assets including Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
“The emergence and growing demand for digital currencies from customers creates both challenges and opportunities for the financial services sector, which has seen a significant number of new players and business models innovating in this area,” CBA CEO Matt Comyn said.
“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.”
Speaking to Business News Australia, Monochrome Asset Management founder Jeff Yew said CBA’s move represented a changing landscape, seeing digital assets move from being a “divisive topic to now becoming gradually accepted among traditional players”.
“After experiencing years of debanking of Australia’s Digital Currency Exchanges’ business accounts, there were some tough times but I see this as the price paid to pioneer a new technology. This makes it all the more fulfilling to see the CBA promoting the adoption of digital assets," said Yew, whose company is a growth fund manager for Bitcoin.
“Truthfully, I wouldn't change a thing, in fact, I'm proud of how far we as an industry have come. The silver lining is that bitcoin and other digital assets will now see even greater adoption than before," explained Yew, also a former CEO of crypto exchange Binance Australia.
As a pioneer in the Australian space, 2021 Brisbane Young Entrepreneur of the Year Awards finalist Yew said he applauded CBA for its move into the sector.
“The bitcoin and digital asset industry is still akin to the early days of the internet, where people were debating the world wide web’s environmental and social impact, and whether the internet will be here to stay,” Yew said.
“At Monochrome, we have the privilege to deal with financial services professionals and fiduciaries on a daily basis and certainly see similar conversations surrounding Bitcoin today. I am glad to see traditional players such as CBA have been and are receptive to new concepts and ideas.”
CBA’s dive into the volatile world of cryptocurrencies and digital assets comes in the wake of many upstart exchanges having already staked their claim in the space.
Whether looking to reputable global exchange Binance or simpler solutions like CoinSpot, the sector is already flooded with options for those looking to buy, sell or hold digital assets.
However, Yew said CBA’s entrance may open the market up to those looking for a convenient option, especially for those who have not yet dipped their toes into the tumultuous market.
“While it addresses investors’ concerns about investing through digital currency exchanges, I see CBA’s move to be more disruptive to smaller DCE (digital currency exchange) players rather than the larger ones like Binance Australia,” Yew said.
“Digital currency exchanges offer a more conducive venue for trading due to the availability of sophisticated trading tools at a low cost, while buying Bitcoin through super apps like the CBA app may bring greater convenience to consumers.
“I can’t speak for the industry, but personally, I do feel this is a development that has made significant headway towards a more circular ecosystem for digital asset investors.”
The news follows the Australian Securities and Investments Commission (ASIC) releasing guidance on crypto-asset related investment products, covering good practices for market operators on how they can meet their regulatory obligations.
"Crypto-assets have unique characteristics and risks that must be considered by product issuers and market operators in meeting their existing regulatory obligations," ASIC Commissioner Cathie Armour said.
"The good practices we published provide practical examples of how these obligations may be met, in a way that maintains investor protections and Australia’s fair, orderly and transparent markets."
Swyftx acting CEO Ryan Parsons welcomed the extended guidance from ASIC, viewing it as a further positive development for the industry following on from the recent senate committee report.
"This is a progressive move and can only serve to advance the adoption of crypto assets in Australia," Parsons said.
"We’ve seen a huge increase in demand for digital assets among retail and corporate customers over the last 12 months, to the point that more than a third of Australian adults under 50 have now owned crypto.
"This type of considered, fit for purpose regulatory response to cryptocurrency and blockchain technology will help to establish Australia as a leading centre for crypto assets and related technologies."
Swyftx co-founders Alex Harper and Angus Goldman won the coveted Trailblazer award at this year's Brisbane Young Entrepreneur of the Year Awards.
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