The Commonwealth Bank of Australia has become the first Australian bank to allow its customers to own and trade cryptocurrencies through its services.
CBA announced that customers will soon be able to buy, sell, and hold 10 different crypto assets, including Bitcoin, Ethereum, Bitcoin Cash and Litecoin through the CommBank app.
The decision was made to allow customers to own crypto assets directly through the bank after CBA research found that a “large number” of its customers want easier access to cryptocurrencies, and are already buying and selling them.
CBA has partnered with crypto exchange Gemini and blockchain analysis firm Chainalysis to design an exchange that can be used through the CommBank app.
We’re becoming the first Australian bank to offer the ability to buy, sell and hold crypto assets directly in the CommBank app. pic.twitter.com/OzX1qtvu9B
— CommBank (@CommBank) November 3, 2021
It’s an interesting move for a bank that has historically been hostile to cryptocurrency users. In 2018, CommBank made the decision to block users from buying crypto using credit cards, stating that the “unregulated and highly volatile nature of virtual currencies” made them unreliable purchases.
However, CommBank has been experimenting with blockchain-based applications for some time, the technology underpinning crypto, also announcing in 2018 that it had taken part in an experiment to track international shipments using blockchain.
In a statement, CBA CEO Matt Comyn said that “We believe we can play an important role in crypto to address what’s clearly a growing customer need and provide capability, security and confidence in a crypto trading platform”.
Michael Gronager, CEO and Co-Founder, Chainalysis, said: “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.”
CBA is capitalising on the security offering of their service, as most cryptocurrency exchanges are run by unfamiliar companies and can struggle to be underwritten by insurance backers, heightening the risk of something going wrong and buyers losing their money.
Comyn said that “customers have expressed concern regarding some of the crypto services in market today, including the friction of using third party exchanges, the risk of fraud, and the lack of trust in some new providers. This is why we see this as an opportunity to bring a trusted and secure experience for our customers”.
While the bank has yet to publish its pricing for its new exchange, Comyn has said that CBA will likely charge slightly more than the “industry standard” of 1-2% per trade.
There is also no detail on exactly how the crypto will be stored, but it is assumed that the coins will be kept on the users’ devices and not stored by the bank. The complete ownership of assets is one of the key principles of cryptocurrency usage and it’s unlikely that users will adopt this new practice unless this is assured.
Cryptocurrency has been around for a little over two decades with the advent of Bitcoin in 2009. It was begun as a decentralised means of owning and using cash that did away with the need for large financial institutions like banks.
Early adopters flocked to the invention because of its apparent practical uses that circumvented institutions they saw as unreliable in the wake of the 2006 global financial crisis.
It appears that crypto has come full circle in its adoption by large financial institutions.