Australian Banking Giant Halts Crypto Trading Pilot Amid Regulatory Uncertainty

Commonwealth Bank (CommBank), the largest bank in Australia, has reportedly suspended its planned in-app cryptocurrency trading pilot without setting a new timeframe for when it would resume the service.

CommBank Pauses Crypto Services at Pilot Phase

According to the Guardian Australia, on Thursday (May 19, 2022), Matt Comyn, the chief executive officer of the Commonwealth Bank, said that while the bank is working on customers’ feedback, robust cryptocurrency regulation is needed before advancing beyond the pilot phase.

Back in November 2021, the Australian banking giant announced plans to offer digital asset services to clients in collaboration with crypto exchange Gemini and blockchain analytics firm Chainalysis. The new feature would allow over six million users of its banking app to buy, sell, and hold up to 10 cryptocurrencies, including bitcoin, ether, litecoin, and bitcoin cash.

While the pilot was scheduled to begin in a few weeks, CommBank said it would roll out more crypto services in 2022. However, in April 2022, the Australian Securities and Investment Commission (ASIC) was yet to approve the bank’s planned product, stating that the financial institution needs to follow a “bunch of rules.”

Meanwhile, CommBank has stalled its pilot program following the collapse of Terra’s algorithmic stablecoin UST, along with the price plunge experienced in the general cryptocurrency market. Speaking at a tech briefing earlier this week, Comyn said:

“As events of the last week have reinforced, 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”.

Australia Keen on Regulating Crypto Industry

The CommBank CEO also said that the bank wants to contribute to the regulation of the crypto sector. According to Comyn:

“We want to continue to play a leading role in providing input into that and shaping the most appropriate regulatory outcome. Our intention still, at this stage is to restart the pilot, but there is still a couple of things that we want to work through on a regulatory front to make sure that that is most appropriate”.

In December 2021, the Australian government announced plans to reform the country’s crypto regulatory framework in 2022 to make it a major cryptocurrency hub.

Meanwhile, the federal treasury is consulting on crypto regulation while allowing for comments until May 27, 2022. Australia’s tax authority, the Australian Taxation Office (ATO), said that the agency will focus on digital assets taxation this year.