Aussie Banks Cautious With Crypto Plans During Market Meltdown

2 mins
21 November 2022, 05:27 GMT+0000
Updated by Kyle Baird
21 November 2022, 05:27 GMT+0000
In Brief
  • Banks and fintech firms still keen on web3.
  • CBA may launch crypto trading services.
  • Industry analysis awaiting regulations before bank entry.
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A number of banks and financial institutions in Australia remain unperturbed about the crypto market slump. Some are still planning to push ahead with their plans to embrace web3.

According to OSL, a subsidiary of Hong Kong-listed BC Technology Group, Australian banks are still keen on crypto.

Speaking to the AFR on Nov. 21, OSL head of global distribution Mark Hiriart revealed the extent of interest that remains.

“Every big bank in the world is looking at this stuff and how to incorporate it into their business,” he said. Banks are more interested in asset tokenization than direct crypto trading services.

OSL did not disclose details on specific Australian banks. However, it said that many were not discouraged by the FTX collapse and contagion than followed.

Commonwealth Bank to Offer Crypto?

Hiriart confirmed that there is unlikely to be an injection of fresh capital for some time but added:

“But from a technology perspective, people aren’t even blinking. If anything, it’s probably going to enable the [regulatory] guardrails … to be firmed up quicker than they probably would have been pre-FTX.”

Last week, Commonwealth Bank CEO Matt Comyn said he was “shocked” by the FTX collapse but didn’t rule out venturing into crypto-related businesses if demand exists.

However, Commonwealth Bank (CBA) shareholders are a lot more skeptical. According to an SMH report on Nov. 21, some industry experts doubted that the bank would allow crypto trading.

Australia Bitcoin ETF

In November 2021, the bank became the first in Australia to announce a pilot program allowing customers to trade crypto through its app. Portfolio manager at Regal Funds Management, Mark Nathan, told the outlet that CBA might not offer crypto trading after all.

“Given the regulatory issues that have plagued the banks, it’s more than possible that they decide it’s an area they don’t want to play in.”

Managing director of White Funds Management, Angus Gluskie, also commented. He said that the bank may still launch crypto trading if it was a long way into developing the product.

Credit Suisse analyst Jarrod Martin also said it made sense for the CBA to offer crypto once the industry was regulated. “If it’s regulated, then who better to offer some form of it than the Commonwealth Bank?” he said.

Push Towards Tokenization

Banks are more likely to use blockchain for the tokenization of assets. These could include carbon credits or a CBDC should one be deployed in Australia. According to Reuters, the Reserve Bank of Australia is expecting to complete its CBDC pilot by mid-2023.

Once the dust settles from the FTX fallout and regulations are in progress, banks and financial institutions may revitalize their crypto ambitions. With mainstream media trying to burn it down, crypto seems to be too hot a potato for them to handle at the moment.


BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.