This will probably go down as the date that crypto went mainstream in Australia.
So for a while now, crypto-currencies (you know, Bitcoin and friends) were seen as a bit too ‘radical’ for the financial establishment.
They were too volatile. There wasn’t enough demand for them. Nobody really understood the tech.
This kept the ‘big money’ on the sidelines.
In fact, in 2018 blocked customers from using their credit cards to purchase crypto:
“Virtual and crypto-currencies such as Bitcoin have yet to meet a minimum standard of regulation, reliability, and reputation.”
How’s that working out for them?
Not so well apparently.
Last week they announced that you can now trade crypto actually, straight from their banking app… err what?!
The big banks know the tide has turned, and there’s a huge pool of latent crypto demand out there.
CBA CEO Matt Comyn said: “The emergence and growing demand for digital currencies from customers creates both challenges and opportunities for the financial services sector, which has seen a significant number of new players and business models innovating in this area.
“We believe we can play an important role in crypto to address what’s clearly a growing customer need and provide capability, security and confidence in a crypto trading platform.
“In looking at ways that we can support our customers, we have made the strategic decision to form an exclusive partnership in Australia with Gemini, a global leader with strong security and a track-record of serving large institutions. CBA will leverage Gemini’s crypto exchange and custody service and integrate it into the CommBank app through APIs,” he said.
The change of heart is interesting and timely, considering the other 3 big ones haven’t moved… yet.
And demand is surging. The covid pandemic has seen a lot of people in lockdown with time and money on their hands. On CBA estimates, 500,000 of their own customers already own crypto in one form or another.
And since 2010 Bitcoin alone has risen a <insert crazy superlative here> 63,514%, (yep, if you invested $1, it’d now be worth $63,514) and 322% in the last year alone.
Either way you slice this pizza, CBA stands make some decent coin from crypto.
Crypto isn’t new. People making insane amounts of money out of crypto isn’t new. What is new here is that now the big end of town wants to get on it. So while other institutional players faff about trying to piece together the crypto recipe, CBA have already set the table and baked the cake.
Hats off to them.
Because the digital landscape changes so fast, there can be huge first-mover advantages.
It allows CBA to set the tone for the market in Australia, and suddenly they can become a trusted guide to those people that want to invest but wouldn’t know where to start.
It is true that this isn’t quite the free-for-all Utopia that crypto’s biggest fans are dreaming about. It’s a closed-loop system, and all transfers in and out of crypto will be through the customer’s own accounts – this tick’s the government watchdog requirements for anti-money laundering and other regulatory requirements.
But this is big news. The biggest bank in Australia just gave crypto a big fat tick. A lot of curious investors will take a lot comfort from this.
And while the crypto market might be super-young, like toddler throwing a tantrum sometimes; they will be relieved to see that there are adults in the room.
CBA’s move will pull a lot more Aussies into the crypto market yet.
That said, how many do you think will realise that there are better ways to invest in crypto than through a closed-loop banking app?
As always, fortune favours the well-educated.