The Commonwealth Bank of Australia (CBA) has put its plans for a second pilot program of crypto trading services on hold indefinitely and cut off access to those in the first round of testing.
CBA sent Cointelegraph a transcript of a Tuesday bank briefing where CEO Matt Comyn said that he was still waiting on regulatory clarity. He also said that he was “working with a number of regulators very closely, as you would imagine, about the appropriate treatment of this particular product:”
“Our intention still, at this stage, is to restart the pilot, but there are still a couple of things that we want to work through on a regulatory front to make sure that that is most appropriate.”
Comyn said there is a Treasury submission for the program already under review, but he did not share any expected timeline for its completion.
Comyn said that last week’s wild volatility appeared to support the need for the extended delay, even though the second pilot program had already been put on ice by April after financial regulators balked at giving regular bank users easy access to crypto. The Australia Securities and Investment Commission (ASIC) objected to the CBA’s services on the grounds that consumer protections were absent.
He said, “It is clearly a very volatile sector that remains an enormous amount of interest:”
“But alongside that volatility and awareness and I guess the scale, certainly globally, you can see there is a lot of interest from regulators and people thinking about the best way to regulate that.”
Comyn also suggested that the bank was awaiting the result of the Federal election on May 21. If a new regime comes into power, it could spell broad changes in the crypto regulatory landscape, which Comyn said “will be a focus for the incoming government to think about.”
Leadership and entrepreneurship lecturer at Swinburne University Dimitrios Salampasis told The Guardian that CBA may be going slowly in case of reputational damage.
Taking into account the recent price crash across the crypto markets due to the collapse of Terra, Dr. Slampasis said “balancing risk, brand equity and regulatory clarity will be key so as to minimize disruption in CBA’s current business model.”
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The CBA was the first major bank in Australia to offer crypto services through its mobile app last November. As the pilot program proceeded, it promised access to the app’s 6.5 million users once fully rolled out. As of now, those plans are on hold indefinitely.
The Commonwealth Bank of Australia has placed a trial of its cryptocurrency trading platform, ‚ComCoin‘, on hold, citing „regulatory uncertainty“ amid sustained hesitancy among the country’s lawmakers to decide on the burgeoning asset class.
Until recently, the bank was eager to explore the potential of cryptocurrency trading. ‚ComCoin‘ was designed to make trading easier for everyday Australians and provided users with secure digital wallets, secure payments, and fees that were lower than traditional exchanges.
The trial, however, has been placed on hold due to a lengthy delay in lawmakers making a decision on cryptocurrency regulation. Australia has yet to issue a formal government position or a policy framework for the industry, leaving the Commonwealth Bank with no clear legal framework to operate.
The bank expressed its disappointment in the delay, citing the many benefits that could be gained from embracing the technology.
“The blockchain-based technology will have the potential to make trade settlement quicker, reduce the administrative burden for customers and partners and enable more efficient access to global capital markets for both investors and issuers,” a spokesperson said.
The Commonwealth Bank joins a number of major banks in Australia that have been affected by the government’s dithering on the issue, stalling initiatives and slowing innovation. Westpac, NAB and ANZ have all put similar projects on hold while regulators remain at an impasse.
Cryptocurrency enthusiasts, however, remain hopeful that a decision will be made soon. In the wake of rising interest in Bitcoin and a noticeable increase in cryptocurrency adoption around the world, it is becoming increasingly difficult for lawmakers to ignore the asset class.
No matter the outcome of the current impasse, the Commonwealth Bank’s plan to trial ComCoin serves as an important reminder of the potential held by cryptocurrency technology. And until lawmakers can come to a decision, the bank will be left watching from the sidelines.