Australia’s Big Banks Remain on the Crypto Sideline, For Now

June 02, 2022, 9:45 AM AEST - 4 weeks ago

Major banks down under are reportedly vulnerable to losing customers to global ‘super apps’, according to the Australian Financial Review (AFR).

This comes as National Australia Bank (NAB) and Australia and New Zealand Banking Group (ANZ) declare they won’t permit their customers to trade crypto, and the Commonwealth Bank (CBA) admits to facing challenges with its crypto project.

‘Big Four’ Need to Get in the Game

This week’s AFR banking summit has left three of Australia’s ‘Big Four’ banks with some food for thought. Simon Cant, co-founder of venture capital firm Reinventure Group, suggested during the summit that the biggest threat to Aussie banks will be the arrival of ‘super apps’. Customers could potentially find an app for all their financial needs, from everyday banking and taking out loans to getting paid, trading crypto, and investing.

One such example of super-app providers is US-based tech giant Square, which has recently acquired Afterpay and has plans to go global with its Cash App. Dom Pym, co-founder of Up – an Aussie neobank – has also encouraged the big banks to investigate human resources software, social media giants, and gaming apps.

https://dompym.com/

This is where people are using technology, and so they’re going to use finance and banking through that … that’s where the next generation of banking customers are.

Dom Pym, co-founder, Up

Traditional financial institutions delaying or denying progress in the crypto sector could be shooting themselves in the foot. NAB’s spokesperson has stated the company is taking a “wait and see” approach to the retail use of crypto, instead focusing on underlying blockchain technology. CBA also seems to be monitoring the market with its CEO, Matt Comyn, stating that “crypto, clearly, is a polarising topic”, despite believing that the industry will be a continuing source of innovation over the coming decade:

CBA’s Crypto Trial Still on Hold

The Commonwealth Bank has been working on bringing crypto to its customers for several months now. In late 2021, CBA began developing methods for customers to earn interest on crypto. To do so the bank entered a partnership with Gemini, a crypto custodian and exchange.

However, last month CBA halted its trading pilot due to impending regulation and market turmoil. There has been no mention of when the pilot might restart, with the trading of those trialling it at the time put on hold.

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