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Australian Banks Wary of Crypto Plans During Bear Market

  • Banks and fintech firms are still interested in web3.

  • CBA may offer cryptocurrency trading services.

  • Before a bank may enter the market, an industry analysis must be performed.

21 Nov 2022 By: Sudeep Saxena
Australian Banks War

A number of Australian banks and financial organizations 

Are unconcerned about the crypto market downturn.

Australian banks, according to OSL, a subsidiary of Hong Kong-listed BC Technology Group, are still interested in cryptocurrency.

In an interview with a local media outlet on November 21, OSL's head of worldwide distribution Mark Hiriart highlighted the level of interest that still exists.

"Every major bank in the world is investigating methods to integrate this technology into their operations," he said. Asset tokenization is more appealing to banks than direct crypto trading services.

OSL did not provide information on specific Australian banks. However, it stated that many were not deterred by the FTX collapse and contagion than followed.

Commonwealth Bank to Introduce Crypto?

Hiriart indicated that a fresh capital injection is unlikely for some time, but added:

“But from a technological perspective, individuals aren't even blinking. If anything, it will allow the [regulatory] guardrails... to be firmed up faster than they would have been before FTX.”

Commonwealth Bank CEO Matt Comyn stated last week that he was "shocked" by the FTX collapse but did not rule out entering crypto-related industries if demand arises.

However, Commonwealth Bank (CBA) shareholders are far more dubious. According to a Nov. 21 report, some industry experts questioned whether the bank would allow crypto trading.

The bank is the first in Australia to announce a pilot program allowing customers to trade cryptocurrency using its app in November 2021. Mark Nathan, portfolio manager at Regal Funds Management, informed the outlet that CBA may not provide crypto trading after all.

Angus Gluskie, managing director of White Funds Management, also responded. He stated that the bank may still introduce cryptocurrency trading if the product was sufficiently advanced in development.

Push Towards Tokenization

Banks are more likely to adopt blockchain for asset tokenization. These might include carbon credits or a CBDC, if one is adopted in Australia. As per reports, the Reserve Bank of Australia anticipates the CBDC trial to be completed by mid-2023.

Once the dust settles from the FTX collapse and regulations are in place, banks and financial institutions may revive their crypto ambitions. With mainstream media attempting to burn it down, crypto appears to be too hot to handle at the moment.

Read also: Vitalik on Ethereum Scalability During FTX Crisis