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Australian Banks Wary of Crypto Plans Due to the Market Crash

Many banks and financial organizations in Australia are unconcerned about the decline in the cryptocurrency sector.

Photo by David Clode / Unsplash

Many banks and financial organizations in Australia are unconcerned about the decline in the cryptocurrency sector. Some people still want to move on with their plans to adopt web 3. Australian banks are still interested in cryptocurrency, said OSL, a BC Technology Group division listed on the Hong Kong Stock Exchange.

OSL's head of worldwide distribution, Mark Hiriart, highlighted how much interest there is still in an interview with the AFR on November 21. He claimed that every major global bank is considering how to apply this information to their operations. Asset tokenization is more appealing to banks than traditional crypto trading platforms. OSL withheld information on particular Australian banks. However, it claimed that many people were not deterred despite the FTX crash and the subsequent pandemic.

Commonwealth Bank to Offer Crypto?

Hiriart acknowledged that it would probably be some time before new capital is contributed, but he also said from a technological standpoint, nobody even bats an eye. If anything, it will likely make it possible for the [regulatory] guardrails to solidify more quickly than before FTX. The FTX crash stunned Commonwealth Bank CEO Matt Comyn last week, but he didn't completely rule out entering the cryptocurrency industry if there is a market for it.

Shareholders of the Commonwealth Bank (CBA) are even more dubious. Some industry professionals reportedly had their doubts about the bank allowing cryptocurrency trading, according to an SMH story (1) from November 21. The bank was the first in Australia to launch a test program allowing users to trade cryptocurrency using its app in November 2021. Mark Nathan, the portfolio manager at Regal Funds Management, warned the newspaper that CBA might not actually allow crypto trading.

Given the regulatory problems the banks have had, it's very feasible that they will decide it's a field they don't want to participate in. Angus Gluskie, managing director of White Funds Management, added his thoughts. If the bank has a long way to go in creating the product, he added, it may still decide to introduce cryptocurrency trading. Jarrod Martin, an analyst at Credit Suisse, added that if the sector was regulated, it made sense for the CBA (2) to sell cryptocurrency. He argued, who better to supply some version of it than the Commonwealth Bank if it's regulated.

Drive toward tokenization

Blockchain is more frequently used for asset tokenization by banks. These may include a CBDC, should one be implemented in Australia, or carbon credits. According to Reuters, the Reserve Bank of Australia (3) anticipates wrapping up its CBDC experiment by the middle of 2023. Banks and other financial institutions may rekindle their cryptocurrency aspirations after the FTX turmoil has subsided and regulations have begun. Crypto looks too hot a potato for the mainstream media to handle right now, with them wanting to burn it down.