Banking News

Commonwealth Bank confirms cryptocurrency offering

commonwealth bank

Australia’s Commonwealth Bank (CBA) confirmed it is the first Australian bank to enable customers to buy, sell and hold crypto assets. It plans to start a pilot in a matter of weeks and will roll out additional features in 2022. It partnered with Gemini, the cryptocurrency exchange and custody service founded by the Winkelvoss twins, to enable the functionality.

CBA will support the purchase of the top ten cryptocurrencies through its banking app. That’s because its research showed its customers were already accessing crypto assets via cryptocurrency exchanges.

“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,” said CBA CEO Matt Comyn.

To address concerns over criminal activities, the bank also partnered with blockchain analytics firm Chainalysis for compliance.

Through partnering with Gemini, CBA is seen by its clients as providing a service without taking the cryptocurrencies onto its balance sheet. Proposed Basel III rules mean that the capital requirements for bank balance sheet exposures are relatively expensive.

Commonwealth Bank has a variety of other blockchain activities. It helped the World Bank issue blockchain bonds, co-founded the Lygon bond guarantee platform, trialed biodiversity blockchain tokens, and participated in trade finance trials.

Some banks currently offering cryptocurrency services include the DBS Exchange in Singapore, BBVA in Switzerland alongside many Swiss private banks such as Julius Baer, an early mover. Earlier this week, Thailand’s Siam Commercial Bank announced it spent $537 million to buy a 51% stake in the local crypto exchange Bitkub.

Many banks’ wealth management divisions enable access to cryptocurrency funds, effectively delegating responsibility to other regulated financial institutions. Others are partnering to facilitate crytocurrency custody, including BNY MellonStandard Chartered and Nomura.