Commonwealth Bank of Australia (CBA) is going through a turbulent time with local financial regulators even as the bank plans to launch its crypto services to all its retail users.
Commonwealth Bank of Australia’s (CBA) mobile app is being prevented by financial regulators from offering broader crypto services. In an Australian first, the bank intends to provide cryptocurrency services to all of its 6.5 million customers.
The CBA’s crypto products began a pilot of the services late last year, to expand to all users of its app, but it now looks to be moving toward a second pilot. According to the Australia Financial Review (AFR) on April 6, the Australian Securities and Investment Commission (ASIC) has stymied the launch with red tape.
ASIC opposes the launch based on consumer safeguards in the target market and product disclosures. To introduce the services, CBA has collaborated with ASIC and numerous other regulatory authorities within the Australian government.
Cathie Armour, the ASIC commissioner, explained her commission’s new attention on crypto, despite claims that it falls outside of ASIC’s scope, at the Australian Financial Review Cryptocurrency Summit on April 6. She stated that, while crypto assets are not inherently financial products that the commission can regulate, the commission is concerned:
“Consumers may be investing in an environment where they are not afforded the same level of protection that applies to financial products and services.”
In response to ASIC’s new guidelines, which restrict much of the work that financial influencers conduct, government Senator Andrew Bragg argued that ASIC’s rules for financial products cannot be applied to crypto assets because bitcoin is not a financial product under Australian law.
Armour stated in her address that ASIC’s ability to truly control crypto assets “depends on whether they fit inside the legislative framework for financial products and services,” which she adds is “a question for Parliament.”
Armour went on to say that she sees “real benefits of innovation being within our regulatory environment,” but warned that “there are a bunch of laws there that you need to obey.”
“There are a bunch of rules there that you need to follow.”
Last November, the CBA announced its plan to launch crypto services, making it the first of the country’s “big four” banks to do so. According to Blockchain Australia CEO Steve Vallas, the move will be “extraordinarily significant.”
The CBA collaborated with offshore crypto exchange Gemini and blockchain analysis firm Chainalysis to make the offering a reality. When completed, the product will support Bitcoin (BTC), Ether (ETH), Bitcoin Cash (BCH), and Litecoin (LTC).
