Australia’s crypto sector is celebrating after the Commonwealth Bank of Australia (CBA) made history earlier this week as the first of Australia’s big banks to move into the crypto-asset trading space.
Kraken Australia MD Jonathan Miller said that anything that gives more Australians access to cryptocurrency is a win for the sector.
“We welcome this pivot from CBA and hope it brings more support for the burgeoning Australian cryptocurrency and blockchain sector,” he said.
Mr Miller noted that CBA's move into the crypto niche represented a major turnaround from the big bank, which has been called out in the past for its antagonism towards the local crypto industry.
Announced earlier this week, CBA is set to partner with crypto exchange Gemini to launch the feature in the coming weeks. Once it arrives, eligible customers will be able to buy, sell, hold and trade cryptocurrencies.
“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.
While the impending launch of crypto trading within the Commbank app is the headliner, Mr Comyn also teased the arrival of other new features for the popular mobile banking app.
“We remain committed to reimagining banking and will continue to bring more functionality into the CommBank app, including investing and shopping,” he said.
CBA’s CommBank app currently boasts 6.5 million customers, but crypto trading will only be available to 2,000 pre-selected customers to begin with. The bank plans to progressively roll out the feature to the rest of their customers over the course of 2022.
In addition, not all cryptocurrencies will be supported. CBA has said that customers will be able to access up to 10 different crypto assets but didn’t specify which.
At this time, only major cryptocurrencies like bitcoin, Ethereum, Bitcoin Cash and Litecoin are confirmed.
This narrower focus is noteworthy because it leaves more dedicated crypto exchanges like Kraken, Binance and Coinbase standing as a better option for more adventurous investors looking to pad out their portfolio with less altcoins and memecoins.
With that competitive advantage in mind, Mr Miller emphasised the importance of consumers doing their research before choosing to put their money into any crypto trading platform.
“Blockchain technology allows users to safely withdraw and hold their crypto directly, it is open source technology and users should be aware that they are not restricted to platforms that lock up their assets such as CBA’s offering,” he said.
Mr Miller told nestegg earlier this year that it was obvious that Australia’s big banks would eventually consider themselves a player in the crypto space, but that he didn’t expect them to offer it directly to their customers anytime soon.
“I think that there's already stepping stones, but do I see a big four banks offering crypto directly to its clients in the next 12 months? Probably not,” he said.
For their part, Gemini global head of business development Dave Abner said that the company was proud to be partnering with Australia’s first retail bank to offer crypto asset trading.
“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,” he said.
While Gemini are handling the custody and exchange service itself, CBA is also partnering with Chainalysis to monitor and mitigate the use of crypto-asset trading for criminal purposes.
Chainalysis CEO Michael Gronager said that 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,” he said.
H&R Block director of tax communications Mark Chapman said that the move may make it easier to trade crypto but warned that it could also see unwary investors fall awry of the ATO's tax rules.
"As a reminder, any investment in cryptocurrency comes with a potential CGT liability, whether you’re selling and converting your profits to Australian dollars or whether you are getting out of one cryptocurrency to invest in another," he said.