Commonwealth Bank Freezes Crypto Trading due to Market Unrest and Volatility
Australia’s Largest Bank, Commonwealth Bank, today announced that it has halted cryptocurrency trading through its app due to market turmoil and unrest among the traders.
The bank started the pilot crypto trade initiative in November 2021, taking advantage of the market bull run and allowed its customers to trade in crypto through its app. Initially, the customers were given the choice of trading Ethereum, Bitcoin and Litecoin.
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The bank had planned to roll out more features and Cryptocurrencies throughout 2022, but decided to halt due to growing uncertainty in the market. The price of bitcoin saw its lowest point since March 2020 due to the ongoing Russia-Ukraine war, high inflation and the fears of recession.
Customers onboarded in the pilot project reported that they have not been able to trade through the app. Commonwealth Bank CEO, Matt Comyn, mentioned that they are waiting for more regulation around crypto currencies before upscaling the project.
During a tech briefing this week, he said that the Crypto Market, despite being highly volatile, has been of keen interest to the public and the regulators, however, in order to globally scale up, there has to be regulation around crypto currencies.
This comes after the federal treasury is picking brains on regulation on cryptocurrency. He went on further to say, “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.”
Dr Dimitrios Salampasis, Fintech leadership and entrepreneurship lecturer at Swinburne University, said that large banks such as Commonwealth Bank, might be panicky about the likely reputational damage due to association with unregulated assets such as crypto. He was also of the view that it is all about balancing risk, and CommBank might keep working in the background on the feedback received from the customers in the pilot project and would want to retain the benefit of being a first mover.
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“The cautionary tone is also a signal to investors, shareholders and ecosystem stakeholders, since the perceived inbound and outbound risk for CBA is probably higher after embarking on such a journey,” he said. “I do not believe that the project – at least for now – is stalled. But balancing risk, brand equity and regulatory clarity will be key so as to minimize disruption in CBA’s current business model.”
The recent crypto crash might also cast doubt on the January announcement of $ 25 million deal between Australian Football League (AFL) and the Crypto.com, a multi-platform Crypto Exchange company. The deal will allow crypto.com to have naming rights on the AFL score review.
AFL declined to comment on the terms of the deal, whereas, A spokesperson from Crypto.com mentioned that the company is still committed to finalize the deal but did not clarify if the payment was in cash or cryptocurrency.
He mentioned that the company is well financed and remains committed to its multi-year sport sponsorships which are crucial to the company’s mission of accelerating the transition to cryptocurrency.
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