Commonwealth Bank of Australia highlights risks in missing out on crypto
CEO of the Commonwealth Bank of Australia (CBA), Matt Comyn, has recently said that the bank is greatly concerned about the risks of missing out on the crypto sector than those associated with its large scale adoption.
The CBA has announced on November 3 that it would start offering crypto-based services, hence making it the first of Australia’s “big four” banks to take the initiative.
As per the latest announcement, the CBA would support the trading of 10 digital tokens directly via its official banking app.
Speaking with Bloomberg TV on November 19, Comyn noted that the bank’s executives are able to see risks in participating, but they see “bigger risks in not participating.”
Comyn further explained that it has become imperative to say that they don’t yet have a view on the asset price itself as they look at it as something “very volatile” and highly “speculative asset.” He stressed that the CBA team thinks that both the “sector and the technology is not going away anytime soon.”
Comyn then suggested that there would be much more to look forward to from the CBA’s crypto adoption play, highlighting that the bank has seen many use cases from the blockchain technology, along side strong demand from consumers.
Therefore they want to understand it and provide a competitive offering to potential customers “with the right disclosure around risks.” Comyn added they want to develop “capability in and around DLT and blockchain technology.”
As the CBA currently appears bullish on crypto and distributed ledger technology, Australia’s Securities and Investments Commission (ASIC) has lately urged for investor caution while simultaneously noting that it is unable to oversee the sector.
Speaking on November 22 at the Australian Financial Review Super & Wealth Summit on ASIC, the Chairman Joe Longo had made a list of suggestions, one being that the financial enforcer cannot regulate crypto since the asset class does not fall under the scope of “financial products” at present, in Australia.
Longo shared that the “demand-driven nature” of the crypto ecosystem and the “rush” has thrown some unique challenges. Presently, many crypto-assets are probably not ‘financial products, hence making it difficult for financial advisers to offer crypto-centric counsel.
ASIC has already provided foundational guidance on exchange-traded funds linked to crypto-assets, indicating that they at least “are financial products” as they are traded on a licensed exchange, therefore there “will be some protections there”, but for a larger part for now, “investors are on their own,” Longo added.
According to Longo’s personal view, he has urged local investors for pursuing cryptocurrencies with “great caution”, highlighting the saying that “don’t put all your eggs in one basket.”
From a policy perspective, wherever the CBA lands, Senator Bragg’s committee was right in highlighting the fact that crypto is “here and now”, “being driven by extraordinary consumer and investor demand,” Longo stated.