Commonwealth Bank of Australia announced on Wednesday 3 November that it would be providing a crypto trading platform for its retail clients. Now, the Australian banking authority has said that it is looking into the regulatory implications that this raises.
A quote attributed to Gandhi: “First they ignore you, then they laugh at you, then they fight you, then you win”.
It seems that crypto is very much still in the fight phase, but when you have such a huge bank as the Commonwealth Bank of Australia (CBA) coming out and saying that it will provide a cryptocurrency trading platform for retail clients, you know that the fight has begun in earnest.
Reuters published an article on Wednesday about the CBA “breaking ranks” with the rest of the banking industry in order to “match offerings from rival fintech firms”.
It was always only going to be a matter of time before the first big bank made such a move as this. The writing is on the wall, and if bank analysts read it properly, then they will know that the archetypal banking institution is becoming obsolete – and fast.
The decision by CBA is quite a turn-around, as it had previously toed the party line along with the other 3 big banks in Australia and New Zealand, namely, National Australia Bank, Westpac Banking Corp., and New Zealand Banking Group Ltd.
However, the CBA move will have really wrong-footed the competition and should give it an edge over them as it now tries to take on the likes of fintechs such as Square, PayPal, and British-based Revolut.
Nevertheless, the are likely to be some sizeable bumps on the road ahead. The Australian Prudential Regulation Authority (APRA) has stated that it was investigating the ramifications and the regulatory issues that may arise.
In response, the CBA has stated that it would welcome regulatory clarity in the sector, and that it had taken customer safety and the regulatory environment into mind when developing its crypto product.
Sophie Gilder, head of blockchain and project leader at CBA stated:
“We would really welcome regulatory clarity for crypto assets. We think it would improve the market, enhance trust, and it would raise the bar in terms of customer protection.”
She also added:
“We’ve got complete transparency as to customer activity and can report on that to regulators when necessary,” Gilder said, which includes customary reporting to the taxation authority.”