CBA crypto offering welcomed

Senators Andrew Bragg and Jane Hume have welcomed the decision by Commonwealth Bank (CBA) to become the first big four bank to offer access to cryptocurrency.

CBA had partnered with crypto exchange Gemini and blockchain analysis firm Chainalysis to offer access to up to 10 crypto assets including Bitcoin, Ethereum and Litecoin.

The bank said it had found a “large number of customers” wanted access to the investment class.

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CBA chief executive, 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 space.

Chair of the Senate Select Committee on Australia as a Technology and Financial Centre, Liberal Senator Andrew Bragg, said: “For too long banks have cast aside cryptocurrency as an illegitimate fringe pursuit. I am pleased the tide is turning as digital assets are mainstreamed”.

The committee had raised concerns over debanking due to association of cryptocurrency assets and had made four recommendations in the committee’s final report and expected those measures to be implemented within the next 12 months.

These included the establishment of a market licensing regime for digital currency exchanges, a policy review of the viability of a retail central bank digital currency in Australia and the use of renewable energy for ‘mining’ of digital assets.

“If adopted in full, the Senate’s crypto reform agenda would bring Australia’s regulations in line with the best in the world, like the UK and Singapore,” he said.

The minister for financial services, superannuation and the digital economy, Senator Jane Hume, said she was “thrilled” digital assets were becoming more accessible to Australians.

“Investment in any asset class is a serious decision and carries risk and taxation liability – so do be aware the rules still apply even to crypto,” Hume said.

There had also been a recent report by the Australian Securities and Investments Commission (ASIC) which gave its approval to the launch of crypto products including exchange traded funds and indicated products could be launched in the future.

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Comyn said that customers shouldn't invest any more into crypto than they were prepared to lose. But being prepared to lose the lot is not a sound philosophy for any investment. It is a gambling philosophy, not an investment philosophy.

I think this is a bit of a giveaway by Comyn that CBA actually views crypto as gambling, not investing. They are launching an app to compete for cash and attention with the likes of TAB and SportsBet.

Anon, buying crypto is no more gambling than buying shares. If your clients ever presented with statements like that you'd know you had some education to do to bring up their level of financial literacy. I don't say this to be rude, but to highlight that personal incredulity is still a fallacy.

Being unregulated there are absolutely scams but ultimately investors are investing in future technology and the future of money and can be guided through changes that are poised to have a serious effect on their wealth. CBA is just getting on the train because they can see what it will do to them if they don't.

Shares are a productive asset, crypto is not. At a stretch, crypto is akin to trading FX, which itself is gambling and not investing.

See stock de-listings and corporate bankruptcy.

Kettle pot black and so on.

"no more gambling than buying shares".
Well, it depends upon the shares you buy really.
The shares of good quality, well managed companies will be here for decades.
Crypto (as it currently exists) will not. No private currency has ever worked, crypto has no intrinsic value nor are there any fundamentals. It's all a huge scam.
Crypto currency is not a financial product and so cannot be recommended by a Financial Adviser - thank goodness.
As far as education goes, read "An eAUD?" from the RBA Governor. One of the many big risks for crypto is that if any existing currency from a first world country goes digital, which it probably will in the near future, all the speculative crypto rubbish will be wiped out instantaneously.

Hi Cal.

China already has a CBDC called eCNY that's done about $9.7b in transactions. China has also completely banned access to any other crypto and that has little to no effect on the market cap.

I don't think any serious person proposes Crypto will displace share markets. More likely it will hammer emerging market currencies and completely disrupt payment services, and remittances. Defi and smart contracts have the ability to do far more than that.

I think Bitcoin maximalists would agree with you about private currency. The whole reason it has an attraction is it is decentralised and trustless. Bitcoin has a cost to mine and maintain the network, somewhat akin to the production costs of gold if you want an analogy. Gold has some industrial use granted, but really what is the intrinsic value of it? What's the intrinsic value of a $50 AUD bill?

Money usually needs to have: durability, portability, divisibility, uniformity, limited supply, and acceptability. If you agree, then I don't see how Bitcoin falls down.

Current Bitcoin market cap is $1.194 trillion in USD terms with billions in transactions each day. All your arguments were a lot more convincing 10 years ago.

The institutional money is starting to funnel in. Have a look at it because the retail money will eventually follow.

1. The "value" of any FIAT currency is the position of the government that issued it. In the case of AUD $50 that's the position of the Commonwealth which has vast assets (and debts of course) including the right of taxation and the power to make certain laws. Please let's not discuss government debt. The position of the US is not much different to the end of WWII. Indebtedness is not an argument in favour of crypto, it just sounds good to say that.

2. Not going to argue the gold case in this short post. I hold some.

3. Most people know something about "blockchain" which is a cool word. The blockchain enables instantaneous settlement of a transaction which we really haven't ever had in the world before. Many/most financial settlements are/were delayed through 'clearing'. Yes instant settlement is huge and fabulous but this can be done in ANY token. You don't need BitCoin or DogeCoin to make the blockchain work. As most people can't separate the ideas of the tech from the token, they equate them. The tech is under valued, the tokens (as they are today) are worthless. When anyone evaluating crypto truly understands that, they all bail.

4. Lastly. Just because something is running doesn't make it a good investment. This will all keep going for a whole on demand. When the last sucker is in, that will be that.

Cal, you will most likely look back on this in a few years time and regret the missed opportunity and marvel and the improvements crypto brings.

Sure money has value because the government says it does. But then so does any asset, including crypto - it has a value because someone values it. It's no different to art for example. Some might think an artwork is worthless, others might pay millions for the same piece. Of course this is a speculative example, but many of the tokens and currencies are similar to shares in that revenue from the underlying business (or system) is shared with participants. This of course gives them a measurable value beyond speculative market forces.

It is laughable that you say no cryptocurrency has ever worked. Bitcoin is around 12 years old and has hundreds of millions of users. At least one country considers it legal tender and a number of large corporate entities now count it among their assets. Sure, 12 years is relatively young but it is crystal clear that Bitcoin is far more likely to be around for the long haul than to completely fail. Look at the dotcom boom - sure the tech changed, businesses failed and evolved and new ones took their place. Like the internet, crypto and decentralised finance are here to stay now. Not everything is a ridiculous meme coin with a dog avatar, perhaps consider scratching beyond the surface - you will be surprised.

Digital currencies from the government won't stop the Defi world either and in fact will continue to support the use case for it. Relying on the stability and prudential management of governments and the global finance network has brought many benefits but has come with many failures - some catastrophic for investors and even entire countries. The GFC, the Corona correction last year, hyperinflation in Hungary, Zimbabwe and Yugoslavia. A good adviser might even consider it prudent to use crypto as a hedge against corrections, inflation and failures in the traditional financial system.

Frankly, anyone who 'evaluates' crypto and can't see how it is a disruptive evolutionary force for finance must be light on between the ears. Just like the dinosaurs, you don't see the comet coming!

This is why I so rarely engage in these debates on crypto as everyone who is pro crypto is such an Evangelist. They never have a qualification in International Monetary Economics or currency markets but they're so sure that this thing they don't really understand is the future.
In the first instance you have misquoted me. I said "no private currency has ever worked". Secondly I have already said it is not a financial product so it cannot be recommended by any Adviser, so I can't use it to "hedge" against anything. Thirdly you missed the critical point about tech and token. Anyway, you can have the last word if you like. Think I'm now done here.

1) I didn't raise debt in any of my comments. The libertarian wing of bitcoin would argue deflationary bitcoin vs inflationary fiat, but you can take that up with them.

2) Me too.

3) Yes, and there are multiple blockchains. Some people prefer proof of work, a lot of movement has been to proof of stake. L1's, L2's, roll ups, sharding yes there is a lot of new technology. 2017/2018 I thought a lot of the future winners would be chains that got speed, stability, and low transaction costs right. A lot of them are off the boil and Bitcoin is still about 50% of the market and Etherium about 20% (I think). You sound like you are unaware that blockchains can update themselves, fork, or even change how they operate. Etherium is in a transition period to move from PoW to Proof of Stake. Anyway, you telling me that its ultimately not worth anything isn't as convincing as you think it is. I'll load up an app in a minute and find out what millions of people think a coin/token is actually worth.

4) See above - take your bet - that's fine. The point is you don't understand it, and you really ought to. Especially if you are a financial adviser making allocation decisions. You don't need to like it, but that's no excuse not to understand it.

Comyn to resign in 5 years just prior to the Royal Commission into crypto collapse. Next CBA CEO inherits his 'it wasn't me it was the last guy and I've got a file note to prove it' defense, this outcome is a surer bet than bitcoin!

It will allow some more money laundering, as the CBA under Comyn got caught out with the flexi-teller cash stuffing scandal - they needed to replace the revenue stream, smart work.

Personally I can't stand crypto and the 'trading' that goes on with it. CBA has FOMO and is looking for a new revenue stream. So much for sticking to their 'core' banking needs of mortgages, savings accounts and general insurance, and Wholesale investors (lol).

I ponder if this website was around 25 years ago when Commsec was launched, what we would have been saying about it then?

Plenty of ignorant comments here from uninformed dinosaurs. The reality is that a parallel financial system is rapidly evolving due to crypto. In many cases, the products and systems made available provide significant financial, access and operational efficiency advantages over traditional systems. Much like the development of the internet in the 90s, this is unstoppable and will replace or transform the way traditional financial services works. Like the internet, there will be bubbles that burst, opportunistic crime and more pain points for early adopters. There is some truth in crypto offering a haven for crime, however important to recognise that much of this will occur anyway via cash and other exploits of traditional finance. Ultimately, this new technology and systems will prevail because fundamentally it is a better way of doing things. Governments and traditional financial services are way behind on this and need to find practical ways to support, integrate and participate rather than block and denigrate. The rise of crypto presents the opportunity of a lifetime for many and as with all opportunities there is risk. The crypto train will keep moving, one way or another. Possibly the biggest mistake that many will make is hopping on too late.

Maybe its because I've been on the sidelines the whole time and completely missed the boat, but I've had to take it seriously lately and honestly its just too hard to not see what you are saying once you really take a hard look at it. Well said Rob.

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