The Commonwealth Bank of Australia (CBA) will become the country's first banking institution to allow customers to buy, sell, and hold crypto-assets.
The CBA announced strategic partnerships with global cryptocurrency exchange Gemini and blockchain analysis firm Chainalysis on November 3rd.
It is worth noting that the CBA is Australia's largest bank, and no other bank has previously offered retail crypto-services in the country. In the future, the bank's CommBank app will include crypto-exchange and custody-related services for customers directly through APIs. According to CBA CEO Matt Comyn,
“We remain committed to reimagining banking and will continue to bring more functionality into the CommBank app including investing and shopping.”
Following a pilot, these features will be "progressively rolled out" over the next year. And the pilot will most likely begin in the coming weeks.
What does this mean for the industry?
The bank revealed that the offering was prompted by increased customer demand. The CEO of CBA also stated,
“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.”
He went on to say that the CBA can play an important role in providing "capability, security, and confidence" in cryptocurrency trading.
According to Chainalysis CEO and Co-Founder Michael Gronager,
“Financial institutions like CBA play an integral role in growing cryptocurrency adoption safely…”
As expected, a lot of reactions to the same were positive. Jefferies banking analyst Brian Johnson, for instance, called CBA’s crypto-strategy “clever.” He commented,
“They’ve got a lot of youth customers and holding on to them and getting more people engaged with their apps with multiple functions, that makes them really sticky and can create long-term value.”
Australia’s ambitious plans
Only a few weeks ago, the country's financial watchdog issued new guidelines for crypto-backed exchange-traded products (ETPs). Following this, the Australian Securities and Investment Commission (ASIC) permitted regulated investment vehicles centered on cryptocurrency for retail investors.
The Australian Senate committee recently proposed new licensing for crypto-exchanges, among other ambitious plans to become a leader in the sector, as demand for crypto-products skyrocketed in the island nation.
The proposal included new laws to govern Decentralized Autonomous Organizations [DAOs], capital gains taxation in DeFi, and a tax break for cryptocurrency miners who use renewable energy.