crypto trading

(Photo by William WEST / AFP)

Commonwealth Bank of Australia now provides crypto trading services

Crypto trading in many countries is still in its infancy stages or awaiting regulatory approvals. In the financial sector, most banks had refused to do business with cryptocurrency providers in the past, with only a handful of banks in Europe and the US offering crypto trading services.

In China,  the government has ordered a halt to foreign virtual currency trading in bank commercial savings and transactions products. China has already begun cracking down on privately mined cryptocurrencies that led to the market price for Bitcoin to fall off a cliff. Institutions, including banks and online payments channels, were told not to offer clients any service involving cryptocurrencies, such as registration, trading, clearing, and settlement.

While China is halting crypto trading, the rest of Asia Pacific are taking a different view. In Southeast Asia, crypto trading, crypto payments, and even crypto exchanges are slowly becoming mainstream as banks and financial institutions are beginning to understand the potential that comes with it.

For example, in Singapore, a survey recently showed that the adoption of crypto payments is slowly increasing, with many keen on trying out the payment method. The Monetary Authority of Singapore has also given the green light to three firms to provide digital payment token services. One of them is DBS Vickers, a subsidiary of DBS Bank, which will provide digital payment token services as a major payment institution and directly support asset managers and companies to trade in digital payment tokens.

Over in Thailand, Nikkei Asia reported that the Siam Commercial Bank has acquired a 51% controlling stake in local cryptocurrency exchange operator Bitkub Online, signaling a change in the approach to fintech and crypto. Meanwhile, El Salvador became the first nation in the world to adopt bitcoin as a legal tender several months ago.

Reports have also shown that Mastercard is preparing to announce that any of the thousands of banks and millions of merchants on its payments network can soon integrate crypto into their products. This includes bitcoin wallets, credit and debit cards that earn rewards in crypto and enable digital assets to be spent, and loyalty programs where airline or hotel points can be converted into bitcoin.

Crypto trading in Australia

(Photo by William WEST / AFP)

In the land down under, the Commonwealth Bank of Australia (CBA) has become the country’s first bank to offer customers the ability to buy, sell and hold crypto assets via the bank’s app. CBA has partnered with one of the world’s largest regulated crypto exchanges and custodians, Gemini, and leading blockchain analysis firm, Chainalysis to enable this. Both partnerships have allowed the bank to design a crypto exchange and custody service that will be offered to customers through a new feature in the app.

The bank reported that the pilot crypto trading service will start in the coming weeks and is hoping to roll out more features to customers next year. Research from CBA showed that a large number of customers want the ability to access crypto assets as an investment class and are already buying, selling, and holding crypto assets through a variety of crypto exchanges.

CBA will provide customers with access to up to ten selected crypto assets including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

According to Matt Comyn, CBA CEO, the emergence and growing demand for digital currencies from customers create 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 the capability, security, and confidence in a crypto trading platform. CBA will leverage Gemini’s crypto exchange and custody service and integrate it into the CommBank app through APIs,” he said.

For Dave Abner, Global Head of Business Development, Gemini, the exponential growth of digital assets internationally, coupled with Gemini’s institutional-grade security and proactive regulatory approach, positions the partnership to set a new standard for banks and financial platforms in Australia and across the globe.

Comyn added, “Customers have expressed concern regarding some of the crypto services in the 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. We remain committed to reimagining banking and will continue to bring more functionality into the CommBank app including investing and shopping.”

A paradigm shift for Australian banks?

Interestingly, CBA’s move to offer crypto trading is somewhat not on the same vie as the other major banks that represent the “big four” of the region. The National Australian Bank, Westpac Banking Corp, and Australia and New Zealand Banking Group Ltd, which make the big four with CBA, faced criticism at a parliamentary hearing in September for refusing to do business with cryptocurrency providers.

Reports by Reuters state that CBA was studying the space at the time but had previously canceled some business accounts of customers who were doing business with cryptocurrencies.

CBA led the Australian industry’s entry into the fast-growing Buy Now Pay Later sector earlier this year in an attempt to fend off competition from Afterpay Ltd. The bank also recently announced a cash incentive for merchant customers who offer their new Buy Now Pay Later product, StepPay.

The bank has also acquired a minority stake in a Silicon Valley-based AI firm, Inc, in a bid to provide smarter and personalised products to its customer base. CBA said it would partner to use’s cloud-based machine learning platform across its operations to develop AI-based products, giving it a lead against its rivals in designing smart financial products.

Dr Andrew McMullan, CBA’s Chief Data & Analytics Officer said, “ will help us to better predict bills and forecast cash flows for both retail and business customers so they can plan ahead. Customers want to be in control, and through the combination of our award winning app, powered by artificial intelligence, we can deliver products and services in the moment to manage unexpected expenses or irregular incomes.

We are not just helping customers make better decisions about their finances, but also about how they can reduce and offset their energy usage and carbon emissions. We will be using our AI models to orchestrate a range of services available across the CBA ecosystem for customers, including through our own products like the Green Loan to help homeowners finance solar or a battery, or through recently announced partnerships such as Amber Energy and CoGo.”

It will be interesting to see how the remaining banks in the big four will react to CBA’s crypto services move. It is unclear if they will be looking to offer similar services as well in the future but one thing is for certain, crypto trading is only going to get bigger and be more influential in the future, especially with more consumers eager to have a piece of the pie as well.