Commonwealth Bank Brings Crypto to Aussies in CBA Break from Big Four

The largest bank in Australia, Commonwealth Bank of Australia (CBA), is allowing its customers to buy cryptocurrency in a landmark decision for the banking industry.

CBA has 6.4 million customers – a large proportion of them from a younger demographic – and will be listing crypto assets, with access available through its mobile app.

Custodian services provided by US crypto exchange and services group Gemini Trust Company. Crypto data and analytics firm Chainalysis is also a partner.

The bank’s move comes as the crypto market has grown to $2.6 trillion on the back of surging interest from retail and to a lesser extent institutional buyers.

CBA crypto move is bid to hang on to its younger customers

The bank says customer demand is behind the move. It has no doubt been keeping a keen eye on the success that fintechs have been making with crypto as its customers flock to crypto-friendly alternatives like PayPal and various crypto exchanges.

“We believe we can play an important role in crypto to address what’s clearly a growing customer need,” said Commonwealth Bank Chief Executive Matt Comyn in a press statement.

“This is really clever from CBA,” Jefferies banking analyst Brian Johnson told Reuters.

“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.”

The vast majority of banks have steered well clear of crypto because of the regulatory uncertainty and attendant risks that it opens banks to.

However, proposals from the Financial Action Task Force around KYC and AML rules are increasingly being adopted by leading crypto firms as regulators in major jurisdictions seek to enforce stricter rules. But until new laws are passed by legislators, for the most part crypto remains outside most financial regulatory perimeters.

Andrew Bragg a Senator from Australia’s Liberal Party and a critic of mainstream finance’s hands-off approach to crypto, commenting on CBA’s announcement said: “I am pleased the tide is turning as digital assets are mainstreamed. For too long, banks have cast aside cryptocurrency as an illegitimate fringe pursuit.”

CBA competitors and regulators will be watching closely

CBA’s decision to add crypto to its product offerings for its customers will be closely watched by its banking competitors as well as the authorities in Australia.

Up until now those banks that have opened up to crypto have done so by offering services to accredited investors and institutions, such as DBS in Singapore and Europe-based Saxo Bank.

The move by CBA is even more surprising given that as recently as September the bank was criticised by some law makers for refusing to have any dealing with cryptocurrency service providers, after it cancel a number of crypto businesses accounts at the bank. At the time the CEO said the institution was still studying the crypto sector.

CBA is one of the big four banks that dominate the retail scene in the country – the others being National Australia Bank , Westpac Banking Corp  and Australia and New Zealand Banking Group, none of which, except now CBA, have crypto on their platforms.

CBA crypto: Pilot includes listing of BTC, ETH, BCH and LTC

CBA is currently piloting the new crypto service, which consists of an exchange and associated custody services.

Commonwealth Bank of Australia will initially be offering customers the opportunity to buy bitcoin (BTC), ethereum (ETH), bitcoin cash (BCH), litecoin (LTC) and a number of other top crypto assetsn.

The bank said more services would be rolled out next year and it was exploring crypto’s use as a means of exchange for goods and services.

CBA is leveraging Chainalysis’s crypto expertise to bolster its compliance and security teams.

Gemini: “Unlock access to crypto investments for many Australians”

Dave Abner, Global Head of Business Development, Gemini, said in a statement accompanying the announcement: “We are proud to be providing exchange and custody services to CBA as they begin to unlock access to cryptocurrency investments for many Australians.

“The exponential growth of digital assets internationally, coupled with Gemini’s institutional-grade security and proactive regulatory approach, positions this partnership to set a new standard for banks and financial platforms in Australia and across the globe.”

Michael Gronager, CEO and Co-Founder, Chainalysis, added: “Financial institutions like CBA play an integral role in growing cryptocurrency adoption safely.

“We are thrilled to be a part of this important alliance with CBA and our partner Gemini to play a pioneering role in building trust in cryptocurrencies in the Australian market.”