Cryptocurrency may have found some of its earliest uses on the dark web, but it is increasingly seen and marketed as a legitimate asset. Much of what underpins its legitimacy is the growing number of major companies actively participating in the space.

In Australia, the first to signal its intention to enter the market was the Commonwealth Bank of Australia (CBA) when it announced in November that it would begin offering customers the option to buy, sell and hold crypto assets through its Commbank mobile app. A pilot program for this feature is currently underway.

Speaking to ZDNet, ABC’s Head of Blockchain and Digital Assets Sophie Gilder said the bank’s strategic decision to deploy crypto services was driven by the growing adoption of crypto- currency by its customers.

“At last count, around 700,000 of our customers are already transferring money to crypto exchanges, so we can see that they are already active in this space. Our customers are already there whether we are there or not,” she said.

She also thinks the narrative around cryptocurrency about where it “used to exist on the fringes” is no longer the case as it becomes “increasingly mainstream.”

“Customers learned more about it; it was more widely adopted,” Gilder said. “We find that it’s certainly still very appealing to young people, but there are also a lot of middle-aged or slightly older customers.”

Gilder added that CBA has the ability to help clients with common issues they face when dealing with cryptocurrency.

“Our customers will come to us, for example, to tell us if we can help them if they lose money while transferring to an exchange, which turns out to be a scam, for example, or if they are taken to transfer cryptocurrency to someone,” she said.

“We are very aware of the issues that some of our customers are having…that’s when we thought, how could we provide a more secure and easier service for people to access cryptocurrency as an alternative investment, not as a payment mechanism. Thus, our product markets cryptocurrency as an alternative investment, not as a method of transferring money.”

When asked if this service would eventually be expanded to allow cryptocurrency as a payment mechanism, Gilder said it was not being considered “at this time.”

“Initially it gives clients exposure to the value of cryptocurrencies and only on-ramps in and out through a CBA bank account, so it’s a closed loop, if you will. It gives us a plus great transparency,” she said.

As CBA gradually rolls out more features of its crypto service this year, it plans to provide customers with access to up to 10 crypto assets, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin.

The bank has partnered with crypto exchange and custodian firm Gemini and blockchain analytics firm Chainalysis to develop the platform. The bank has also structured the product so that it is bound by existing financial regulations.

“We are very careful in the selection of our partner [Gemini] who provide the crypto exchange and custody services because we want to make sure that we have enterprise-grade security and that they have an exchange at scale, so they can provide best-priced execution” , Gilder said.

“We wanted to go with a regulated partner, so Gemini is regulated in New York State, so they have to comply with all the requirements of that program – they have to comply with things like anti-money laundering and We feel that strengthens their offering. The way we designed this is that we tried to go with trusted names, and it’s a measured first step into the space.

“We’ve also structured this as a financial product, so there’s a product disclosure statement for customers to read. It’s a regulated product and under ASIC oversight, so it’s quite different of some of the other propositions in the market in the way we’ve approached it, which I think you’d expect from a regulated institution.”

But CBA is not the only major traditional player entering the crypto market. Last month, Visa launched its Global Crypto Advisory Practice, a new service within its Visa Consulting and Analytics (VCA) business that will advise clients on all aspects of crypto investing and adoption.

“We believe it’s an asset class that’s here to stay and here for the long haul,” Anthony Jones, head of innovations and partnerships at Visa Australia and New Zealand told ZDNet.

Like CBA, Visa has seen customer interest in cryptocurrency take off over the past 12 months. According to a global study by the financial services giant, The Crypto Phenomenon: Consumer Attitudes and Usage [PDF], almost a third of Australians have directly engaged in crypto either as an investment vehicle or as a medium of exchange.

“We’ve seen a significant increase in usage, around 50% over the last 12 months. We’ve seen a huge increase in consumer share…we’re seeing growing interest from our traditional customers, as well than our new digital partner customers in digital currency and digital assets,” Jones said.

Despite the enthusiastic adoption, Jones and Gilder cautioned against the importance of erring on the side of caution.

“We’re not suggesting that people necessarily go out and buy cryptocurrencies. We need them to do their own research from that perspective…but it does come down to familiarizing yourself with the capabilities of cryptocurrencies and cryptoassets” , said Jones.

Gilder noted that despite the growing legitimacy of cryptocurrency, it is still a volatile asset and therefore comes with potential risks.

“We think there is a place for people in terms of money to buy cryptocurrency, but we have a lot of caveats, and we also have transaction apps in our product to make sure people don’t stretch too far,” she said.

Further signals of cryptocurrency solidifying as an asset in the Australian financial market were marked by the Australian government’s announcement that it would be implementing crypto-related reforms this year. Some of the expected reforms include requiring digital currency exchanges (DCEs) to hold Australian investors’ assets onshore. It will also begin consultations early this year on a licensing framework for ELDs that will allow consumers to buy and sell crypto assets in a regulated environment.

The taxman comes

Australia’s Board of Taxation, meanwhile, will begin research to provide advice on a policy framework for the taxation of digital transactions and assets.

The move comes after the Australian Center for Transaction Reporting and Analysis (Austrac) was granted approval in late 2017 to extend AML/CFT regulations to crypto exchanges. -cash.

Therefore, digital exchange service providers must apply the same obligations as other companies in the financial sector and are required to identify, manage and mitigate the risks of money laundering, terrorist financing and other serious crimes. They are also required to report suspected cases to Austrac.

“Austrac and our law enforcement partners have a strong focus on preventing and detecting criminal abuse of the financial industry. This includes targeting new and emerging methods to launder money, including crypto- As part of these efforts, we are also increasingly collaborating with businesses and new technologies to detect and disrupt criminal activity,” an Austrac spokesperson said.

“Austrac will continue to invest in our cryptocurrency capability to provide expert intelligence to our national and international partners.”

ABC’s Gilder has no doubt that these new regulations will help shape the cryptocurrency narrative in Australia further, and hopefully for the better.

“There will be significant changes in the regulations [globally]. There will be continued innovation in the DeFi (decentralized finance) space – some of it will work and some won’t, but it will be fascinating to watch. It’s a melting pot of creativity,” she said.

“And, I think we’ll continue to see this integration of cryptocurrencies where a lot more people are entering the market, and it’s both institutional and also at the individual level, so we’re seeing it grow.”

See also

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ATO says over 600,000 Australians have tried their hand at crypto
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Blockchain Australia wants a safe haven for crypto providers
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