Australia’s largest bank, the Commonwealth Bank, has halted the launch of cryptocurrency trading through its app owing to the high volatility and uncertainty in the market. The bank had initiated a pilot program for the same and now those who were participating are not able to continue trading crypto through the app.
Matt Comyn, the chief executive of the Commonwealth Bank, said they are working on the feedback received from customers. He pointed out that more regulation would be needed before advancing to the next stage. Comyn highlighted that last week’s events reinforced that crypto is clearly a very volatile sector. But globally, there is a lot of interest from regulators and people contemplating the best way to regulate that.
Moreover, the Australian Treasury is consulting on regulation around cryptocurrency – submissions are open until May 27. Comyn said the government, after the election, would focus on how to most appropriately regulate the sector. The Commonwealth Bank wants to play a leading role in providing input into that and shaping the most appropriate regulatory outcome. It intends to restart the pilot but it still has to work on a couple of things on a regulatory front.
Dimitrios Salampasis, an expert at Swinburne University, believes large incumbents like the CBA were scared about the potential reputational damage from association with crypto. He said it was about balancing risk. The expert explained that the cautionary tone is a signal to investors, shareholders, and ecosystem stakeholders alike. The perceived inbound and outbound risk for the Commonwealth Bank may be higher after embarking on such a journey. However, brand equity, balancing risk, and regulatory clarity are key to minimizing disruption in CBA’s current business model.