Australian banking regulator examines CBA’s jump into crypto

[ad_1]

Representations of the Bitcoin virtual currency stand on a motherboard in this photo illustration taken on May 20, 2021. REUTERS / Dado Ruvic / File Photo

SYDNEY, Nov. 5 (Reuters) – Australia’s banking supervisor has said it is examining the regulatory implications of the Commonwealth Bank’s (CBA.AX) planned introduction of bitcoin trading for unsophisticated retail investors – the first bank in Australia to do so.

The CBA has said it would welcome a clear regulatory framework for cryptocurrencies, which are not officially regulated in Australia.

On Wednesday, the CBA broke through the ranks of the banking industry to match offerings from fintech companies by announcing that it will become the first major bank in the developed world to offer a platform for retail clients to trade crypto currencies. Read more

The move forces Australian financial watchdogs to immediately focus on the volatile $ 2 trillion cryptocurrency industry which many believe has no intrinsic value and is based on users’ complete trust in different types of software.

A spokesperson for the Australian Prudential Regulation Authority (APRA) told Reuters that the country’s largest lender has informed the regulator of its plans and that the authority is “reviewing the regulatory issues that this raises.”

After a staged 2,000-person pilot, CBA will provide easy access to 10-asset crypto trading to around one-third of Australian adults already using its industry-leading mobile banking app, which also offers discounts to energy retailers and carbon emissions trackers.

CBA’s crypto trading service will be provided in partnership with Gemini Trust Company, one of the world’s largest crypto exchanges established in 2014 by the Winklevoss brothers, famous for accusing the founder of Facebook of stealing their idea.

The anti-money laundering watchdog, the Australian Transaction Reports and Analysis Center, said it was “engaging … in relation to this new product offering” with CBA and Gemini.

The CBA said it would welcome regulatory clarity in the space and that its product was designed with risk mitigation and regulatory concerns in mind both for the bank and to ensure that people feel safe when using the product.

“We would be really happy to clarify the regulations for crypto assets. We believe it would improve the market, build confidence and raise the bar in terms of customer protection,” said Sophie Gilder, head of blockchain at Commonwealth Bank. and project manager of the bank.

CBA’s offering will be a “closed loop” connected to a CBA bank account, which would be monitored by Chainalysis cryptocurrency anti-money laundering services for any potential suspicious activity.

“We have full transparency about client activity and can report it to regulators as needed,” Gilder said, which includes the usual reporting to the tax authority.

“We will not open it, once the pilot is over, to everyone. It will be a more gradual process than that, which I think is appropriate given the volatility of the crypto.”

Reporting by Paulina Duran in Sydney; Editing by Michael Perry

Our Standards: Thomson Reuters Trust Principles.

[ad_2]