SYDNEY, Nov 3 (Reuters) – Commonwealth Bank of Australia will become the country’s first main-street bank to offer a platform for retail customers to trade cryptocurrencies, breaking industry ranks as it looks to match offerings from rival fintech firms.
Australia’s biggest lender said it will partner with New York-based exchange Gemini Trust Company LLC to offer a “crypto exchange and custody service” through a new feature in its mobile banking app that is used by about 6.4 million customers.
“We believe we can play an important role in crypto to address what’s clearly a growing customer need,” Commonwealth Bank Chief Executive Matt Comyn said in a statement.
Cryptocurrency executives and supporters said the move would help validate the $2.6 trillion crypto trading industry.
“Nothing that I know, particularly from a bank of this size, enables retail clients to directly buy crypto through their platform, to the best of my knowledge. So it’s really exciting,” said Caroline Bowler, chief executive of BTC Markets, one of the largest crypto exchanges in Australia.
Soaring popularity of cryptocurrencies has posed a problem for mainstream banks as they try to balance clients’ interest in digital coins with regulatory concerns about their risks.
Some large banks in the U.S. and Europe offer cryptocurrency trading services to institutional clients. Others, like Saxo Bank, offer access to crypto through ETFs or other crypto-linked products. Singapore’s DBS Group offers a platform for cryptocurrency trading to wealthy clients.
CBA’s move puts it at odds with its “Big Four” peers that together dominate the banking sector: National Australia Bank (NAB), Westpac Banking Corp and Australia and New Zealand Banking Group Ltd.
In September the group faced criticism https://www.reuters.com/world/asia-pacific/australian-banks-reject-pressure-deal-with-cryptocurrency-firms-2021-09-09 at a parliamentary hearing for refusing to do business with cryptocurrency providers.
At the time, Comyn said CBA was studying the space but had previously cancelled some business accounts of customers who were doing business with cryptocurrencies.
“I am pleased the tide is turning as digital assets are mainstreamed,” Liberal party Senator Andrew Bragg, who led an inquiry into the sector, said in a statement. “For too long, banks have cast aside cryptocurrency as an illegitimate fringe pursuit.”
CBA said its move had been driven by growing client demand and comes as local crypto services are being offered by fintechs such as Square, PayPal Holdings and British-based Revolut.
The bank also lead 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.
“This is really clever from CBA,” Jefferies banking analyst Brian Johnson said.
“They’ve got a lot of youth customers and holding on to them and getting more people engaged with their apps with multiple functions, that makes them really sticky and can create long-term value.”
Starting with a pilot this year, the bank said it would offer the ability to buy, sell and hold 10 cryptocurrencies including Bitcoin, Ethereum and Litecoin.
More features would be rolled out in 2022 and it would explore options including offering crypto payments for goods and services, it said.
It would work with U.S. blockchain data platform Chainalysis to help its compliance team monitor and mitigate the threat of cyber crimes.
(Reporting by Paulina Duran in Sydney; Editing by Karishma Singh, Stephen Coates and Richard Pullin)
Photo – EPA-EFE/JOEL CARRETT