Australian Watchdogs to Check CBA’s Crypto Offering Regulatory Implications

The Australian banking regulator is looking at the implications of the Commonwealth Bank’s planned introduction of Bitcoin (BTC) trading to retail investors in terms of regulatory affairs. According to Reuters, the bank will become the first one to do so in the country.

Concerns are related to a lack of regulatory framework for Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term in Australia, as these assets are not formally regulated in the country. The CBA announced this week that it planned to introduce crypto services to retail customers in a manoeuvre that encourages regulators to assess the crypto market. The Australian Prudential Regulation Authority (APRA) is already aware of the plans and told Reuters that it is looking at the ‘regulatory issues’ it might bring to the table.

Initial plans said that the CBA’s crypto trading service would be provided in partnership with Gemini Trust Company, which is one of the biggest cryptocurrency exchanges founded by the millionaires, the Winklevoss twins. “We would really welcome regulatory clarity for crypto assets. We think it would improve the market, enhance trust, and it would raise the bar in terms of customer protection,” Sophie Gilder, Commonwealth Bank’s head of Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term and the bank’s project leader, commented on the announcement.

Monitoring Anti-Money Laundering Potential Transactions

Gilder also clarified that the bank is already aware of anti-money laundering potential issues through cryptocurrencies, and that is why the CBA will monitor any suspicious activities with Chainalysis, a blockchain analytics firm.

“We’ve got complete transparency as to customer activity and can report on that to regulators when necessary. We will not, as soon as the pilot ends, open it to everyone. It will be a more gradual process than that, which I think is appropriate considering the volatility of crypto,” Gilder added.

The decision to introduce these new services was made as a large number of its customers want to access crypto assets as an investment class. This step by the bank will bring crypto to its 6.4 million customers.