- Australia’s leading bank appreciates that the regulatory body has issued a clear regulatory framework on cryptocurrency trading.
- The cryptocurrency pilot program is being run in partnership with the Gemini Trust Company, one of the largest exchange platforms in the world.
The Australian Prudential Regulation Authority (APRA) revealed that it is examining the regulatory implications of the planned foray into trading bitcoin being made by Commonwealth Bank (CBA.AX) retail investors.
The CBA is the first Australian bank to offer the service. The bank itself has requested the establishment of a regulatory framework for cryptocurrencies, which are not yet regulated in the country, to offer greater clarity.
Through its platform, Australia’s leading bank has become the first major bank in the world to offer a space for cryptocurrency trading for unsophisticated retail clients.
In the wake of the announcement, Australian financial regulators are analyzing the potential new financial market scenario, especially in regards to such a highly volatile industry that has already hit $2 trillion in total market capitalization.
For many, cryptocurrency trading represents a bubble, as it lacks its own value, and is completely dependent on the trust of cryptocurrency holders. Distrust around cryptocurrencies still holds concern for regulatory bodies.
A spokesperson for Australia’s regulator claims that the bank has informed the regulator about its cryptocurrency plans. Speaking to the website businesshala.com, he also reported that the APRA is “investigating the regulatory issues raised” by the project.
The largest lender in the country is providing its clients with the new cryptocurrency trading service in partnership with the Gemini Trust Company, one of the largest exchange platforms in the world.
The CBA pilot program involved approximately 2,000 customers, and started with 10 types of digital currencies. The bank has so far managed to extend its services to nearly a third of Australia’s adult population using its mobile banking app.
The Most Important Thing Is That Users Feel Safe
The CBA is at the forefront of financial services and is working to match fintech companies that operate in the country. The bank also offers discounts and carbon pools to retail energy customers, and even emissions trackers.
Following the CBA’s announcement this week, the Australian Anti-Money Laundering Transaction Reporting and Analysis Center, which is responsible for preventing and detecting criminal activity in the financial industry, confirmed its commitment to the bank and Gemini “regarding this new product offering … “.
“We would really appreciate the regulatory clarity for crypto assets. We believe it will improve the market, build trust and raise the bar in terms of customer protection,”
Commonwealth Bank Blockchain Director Sophie Gilder said when asking APRA to take care of issuing a regulatory framework.
The project leader said that the new product was designed to include risk mitigation for customers and with the Australian government’s regulatory concerns in mind. She expressed that the most important thing is that the service’s users feel safe when utilizing the product.
The CBA service will be provided in a “closed circuit” associated with established bank accounts. In order to detect any suspicious activity related to money laundering, the accounts will be monitored by the cryptocurrency service provided by Chainalysis.
"We have full transparency regarding client activity and we can report on that to regulators when necessary, including regular reports to the tax authority,"
On The Flipside
- “When the pilot is done, we will not open it to everyone. It will be a more gradual process than that, which I think is reasonable given the volatility of cryptocurrencies,” the bank executive clarified.
Why You Should Care?
- With the CBA, an irreversible process of opening the world’s great banks to cryptocurrency trade is beginning. Small American banks have already taken similar actions in the past, while large banks are now beginning to explore crypto asset investments.