08 Apr Novel Crypto Product Offered by Australian Bank Runs into Regulatory Snag
Australia’s financial regulators have yet to approve plans by the Commonwealth Bank of Australia (CBA) to offer access to crypto products for its over 6.5 million customers.
The regulatory watchdog says the onus is on the CBA to comply with laid-down rules and regulations for financial products. Opposition from the regulator has prevented the CBA from moving beyond the pilot phase of the project.
Will CBA’s Crypto Product Be Delayed?
According to a report by Financial Review on April 6, CBA’s novel crypto product is facing launch delays due to issues raised by the Australian Securities and Investment Commission (ASIC).
Announced back in November 2021, CBA plans to take a leaf from its counterparts on Wall Street and join the trend of commercial lenders offering crypto products.
Reports indicate that there is uncertainty over whether CBA’s crypto product complies with ASIC’s design and distribution regulations.
Speaking at a recent summit, ASIC commissioner Cathie Armour stated that the watchdog was not against innovation as long as these products comply with established legal and regulatory protocols.
According to Armour, there are “a bunch of rules” that the CBA and any other entities looking to deliver crypto products to consumers must follow.
The CBA’s digital asset proposition will see the bank offer customers exposure to 10 cryptocurrencies, including bitcoin and ether. US-based exchange Gemini will offer custody services.
On the subject of custody, Australian Senator Andrew Bragg suggested that local platforms should emerge in the country.
CBA’s crypto offering will not, however, include the ability for clients to use their coins to buy items online.
Despite the regulatory snafu, the bank has stated that it will move to the second pilot stage while working on recommendations received from its consultations with policymakers.
Banks Moving to Offer Access to Digital Assets
Commercial lenders in some countries like the US and Switzerland are beginning to offer crypto products to both retail and institutional clients. The move indicates an emerging pivot in the attitude of banks towards the industry.
In March, Goldman Sachs became the first Wall Street lender to facilitate over-the-counter (OTC) crypto trades. Also, in March, Cowen began offering spot digital asset trading for its big-money clients.
The New York Digital Investment Group (NYDIG) has also been building the infrastructure required for more US banks to offer crypto services.