The Commonwealth Bank Is Opening Up to Trading Cryptocurrency

In early November, the Commonwealth Bank announced that it plans to allow users of it’s CommBank app to trade cryptocurrencies. This announcement is a game changer for cryptocurrency in Australia, as the Commonwealth Bank is consequently the first of the four major banks to allow their customers to trade cryptocurrencies via their services. 

One of the Commonwealth Bank’s major reasons for deciding to allow their customers to trade cryptocurrency is because there is a huge demand for it already as close to 500,000 of their customers are already engaging in trading crypto.

“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,” says CBA’s chief executive, Matt Comyn.

Before the end of 2021, the Commonwealth Bank invite 2,000 customers to join a pilot program where they will be able to buy, hold, and sell cryptocurrencies through the CBA phone app.
The bank will initially offer 10 of the most popular coins, including Bitcoin and Ethereum.

It is important to note that under the Commonwealth Banks new initiative users won’t be able to do is transfer cryptocurrencies to other people all transactions will involve either buying or selling the coins for real money. This is because crypto transfer is difficult to trace making it attractive to criminals and a nightmare for the bank when it comes to complying with anti-money laundering and counter-terrorism finance laws as this is something banks find extremely difficult to track with regular money transfers.

Instead, all movements in and out of crypto are to take place through the customer’s own accounts, allowing the bank to better keep track of what’s going on.

Despite the huge popularity of cryptocurrencies, it is important to note that they are extremely damaging to the environment. This is due to the fact that cryptocurrencies are generally created by computers solving difficult maths problems, a process called “mining” that uses a lot of electricity.

At the present time, Bitcoin mining alone uses more electricity than Argentina, the majority of which comes from fossil fuels. Bitcoin mining is also on track to overtake Australia in terms of the amount electricity is used to mine the currency.

It is interesting note that a number of countries such as; China, Turkey and Vietnam have banned or restricted the use of cryptocurrencies in their jurisdictions.

The Commonwealth Bank’s CEO Matt Comyn told the media that the huge increase in demand for digital currencies from the banks 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.

“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. In looking at ways that we can support our customers, we have made the strategic decision to form an exclusive partnership in Australia with Gemini, a global leader with strong security and a track-record of serving large institutions. CBA will leverage Gemini’s crypto exchange and custody service and integrate it into the CommBank app,” says Matt Comyn CEO of The Commonwealth Bank.

The Commonwealth Bank has announced that it will be partnering with Chainalysis, a global leader in blockchain data and analytics who will assist compliance teams with monitoring and mitigate the threat of crime via the crypto asset exchanges.

The collaboration between the CBA and Chainalysis is important as customers of the bank have voiced their concern regarding some of the crypto services in the market today, particularly in regards to the friction of using third party exchanges, the risk of fraud, and the lack of trust in some new providers.

“Financial institutions like CBA play an integral role in growing cryptocurrency adoption safely. We remain committed to reimagining banking and will continue to bring more functionality into the CommBank app including investing and shopping,” said Michael Gronager, CEO and co-founder of Chainalysis.

The Commonwealth Bank Is Opening Up to Trading Cryptocurrency <br>