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The first bank in Australia to announce crypto-services is reportedly facing regulatory hurdles.
Local reports confirmed today that the Commonwealth Bank of Australia is facing delays to extend new crypto offerings to retail investors. Sources to Financial Review state that the Australian Securities and Investments Commission (ASIC) has obstructed CBA’s banking app pilot that included crypto assets.
The report further reveals that the watchdog is concerned about the institutions’ “product disclosure statement, the target market for the product and consumer protection”.
Crypto framework overhaul
ASIC commissioner Cathie Armour stated in a recent crypto summit, “We’re interested in any sort of new innovation where we think there are real benefits of innovation being within our regulatory regime. There are a bunch of rules there that you need to follow.”
Meanwhile, CBA has not released an official statement, and is reportedly working with other national regulators to comply with the requirements.
CBA had announced its plans to allow customers to buy, sell, and hold crypto-assets back in November 2021. For which, the lender had partnered with crypto-exchange Gemini and blockchain analysis firm Chainalysis. Soon after CBA decided to delve into the space, Australia and New Zealand Banking Group also followed suit. ANZ became the first bank in the country to mint the Australian dollar stablecoin A$DC in March this year.
Meanwhile, it is being reported that CBA is bracing for a second pilot around its digital asset offerings. But lately, ASIC has been shaking up the regulatory framework around cryptocurrencies. Commissioner Armour also underlined, “The extent to which our regulatory regime applies to crypto-asset investment products depends on whether they fit within the legal framework for financial products and services.”
Tightening global rules
Just last month, the Australian Competition and Consumer Commission (ACCC) had initiated a lawsuit against Meta Platforms, formerly known as Facebook, over scam crypto ads. Meanwhile, as the country tightens its grip on the sector, influencers promoting financial products have also been warned. Additionally, Australia recently proposed regulations to cover cryptocurrency taxes, investor protection from criminals, and ways to regulate digital banks, cryptocurrency exchanges, and brokers.
However, despite the recent efforts, Senator Andrew Bragg believes that Australia is in a regulatory race with front-runners like Singapore.
With that, Former ASIC chair Greg Medcraft pointed out at the Australian Financial Review Cryptocurrency Summit on Wednesday that the regulators will have to focus on six areas to regulate cryptocurrencies. It includes money laundering, privacy, competition risk, climate risk, and, the systemic risk faced by the banking system.
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