As the conversation around cryptocurrencies in Australia continues to rise in volume, there’s a big question that many have left unsaid.
When will one of Australia’s major banks make their play in the space, and what will their role be?
Kraken managing director Jonathon Miller told InvestorDaily that it “seems obvious” that the banks would eventually consider themselves as a participant in the crypto conversation, but doesn’t expect Westpac, ANZ, NAB or CBA to offer crypto any time soon.
Pointing to other markets, Mr Miller noted that a number of overseas banks, particularly investment banks, are now offering crypto to their clients directly. Locally, he pointed to the Macquarie Group’s recently announced partnership with bitcoin mining player Blockstream.
“Perhaps it’s the start of something to come from them,” Mr Miller suggested, adding that there are already a number of listed and unlisted funds playing in the crypto space.
“I think that there’s already stepping stones, but do I see a big four [bank] offering crypto directly to its clients in the next 12 months? Probably not.”
Talking to InvestorDaily, 86 400 CFO Belinda Hogan said that it was not yet clear what a big bank-backed play into the crypto space would look like. She added that the possibility raises a number of questions.
“Will it look like big banks investing directly into crypto? You can borrow money at the moment to buy shares, will you be able to borrow money in the future to buy crypto? Or will it be more just facilitating and allowing you to do transactions through crypto exchanges and being a little bit more open about that?” she said.
While she acknowledged that Australia has already seen some neobanks come out and signal their intentions to play a part in the conversation around crypto, it was anyone’s guess as to how the biggest players in the financial ecosystem would approach the asset class.
That being said, she said that the rising popularity of the asset class represented a unique disruption to the typical relationship between banks and local regulators.
“As crypto starts to change the shape of the financial services landscape, what does that mean [for] both of the regulators and banks? I think it’ll be really interesting to watch,” Ms Hogan said.
Speaking to the House of Representatives’ standing committee on economics last week, ASIC chair Joseph Longo said that the securities watchdog was happy to work with the government on what that reform might look like, but remained concerned by the rapid rise of cryptocurrencies and other crypto assets.
“As far as crypto assets in general are concerned, the Corporations Act as it’s presently framed is not set up to deal with that particular asset class,” Mr Londo warned.
