Aussie Banks Cautious With Crypto Plans During Market Crash

A number of banks and financial institutions in Australia remain unfazed by the collapse of the crypto market. Some are still planning to go ahead with their plan to adopt Web3.

According to OSL, a subsidiary of Hong Kong-listed BC Technology Group, Australian banks are still big on crypto.

Addressing the FRG on November 21, OSL’s head of global distribution, Mark Hiriart, revealed the extent of the interest that remains.

“Every major bank in the world is looking at this stuff and how to incorporate it into their business,” he said. Banks are more interested in assets tokenization than direct crypto trading services.

OSL did not disclose details of specific Australian banks. However, he said many were undeterred by the ensuing FTX collapse and contagion.

Will Commonwealth Bank offer crypto?

Hiriart confirmed that there is unlikely to be an injection of fresh capital for some time, but added:

“But from a technology perspective, people don’t even blink. If anything, this will probably activate the [regulatory] railings… to firm up faster than they probably would have before FTX.

Last week, Commonwealth Bank CEO Matt Comyn said he was “shocked” by FTX’s collapse, but didn’t rule out venturing into crypto-related businesses if the demand exists.

However, Commonwealth Bank (CBA) shareholders are much more skeptical. According to an SMH report on Nov. 21, some industry experts doubted the bank would allow crypto trading.

In November 2021, the bank became the first in Australia to announce a pilot program allowing customers to trade crypto through its app. Portfolio manager at Regal Funds Management, Mark Nathan, told the outlet that CBA might not offer crypto trading after all.

“Given the regulatory issues that have plagued banks, it’s more than possible that they will decide this is an area they don’t want to play in.”

White Funds Management managing director Angus Gluskie also commented. He said the bank could still launch crypto trading if the product development takes a long time.

Credit Suisse analyst Jarrod Martin also said it makes sense for the ABC to offer crypto once the industry is regulated. “If it’s regulated, then who better to provide some form of it than the Commonwealth Bank?” he said.

Push towards tokenization

Banks are more likely to use blockchain for asset tokenization. These could include carbon credits or a CBDC if it were to be rolled out in Australia. According Reutersthe Reserve Bank of Australia plans to complete its CBDC Pilot by mid-2023.

Once the dust settles from the FTX fallout and ongoing regulation, banks and financial institutions could reinvigorate their crypto ambitions. With the mainstream media trying to burn itcrypto seems like too hot a potato for them at the moment.


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