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Commonwealth Bank CEO Matt Comyn said that missing out on the crypto boom was one of the biggest risks banks face.
Commonwealth Bank doubles down on crypto
The Commonwealth Bank of Australia recently came out in favour of crypto when it announced that it would offer crypto services to its clients from its Commbank app. Its CEO Matt Comyn now backed up that decision in an interview with Bloomberg, affirming that crypto was risky but not participating in crypto and missing the opportunity was even riskier. In the interview, Comyn called digital assets “very volatile and speculative” but said the risks of not participating outweighed the inherent risks of crypto.
Before the interview last week, the CBA announced that it had purchased a small stake in Gemini Trust Co., the crypto exchange being launched by the Winklevoss twins. The bank would also partner with Gemini to provide custody for the exchange’s funds, it said.
Comyn also underscored how the bank’s position was not necessarily pro or contra cryptocurrencies, which it sees as “a very volatile and speculative asset,” but rather that the technology wasn’t going away anytime soon. Thus, the CBA would need to understand it and provide “a competitive offering to customers with the right disclosures around risks.
Comyn in favor of CBDCs
Testament not being a crypto bull, unlike the Winklevoss twins with whom the CBA plans to do business, Comyn also advocated for a central bank digital currency. He acknowledged that central banks worldwide were looking at such a possibility and stated that the Commonwealth Bank would like to participate in building out such a CBDC. While Comyn is right that many central banks are indeed on to issuing their own currency, others, like El Salvador, are placing their chips on more Bitcoin adoption.
Comyn on China and Inflation
Comyn also briefly covered two issues that are only partially related to cryptocurrencies. He expects inflation to persist throughout 2022, despite strong economic growth and a low unemployment rate. Inflation would certainly be higher than in many years, although he did not specify by how much.
Regarding China, Comyn acknowledged the complexity of the relationship and that government would need to manage the relationship, as China continues to be a very important trading partner.
Can Australia afford to miss out on crypto?
With 38 percent of Australian Millennials and Generation Z reportedly owning crypto, Comyn may be right that the risks of missing a generational shift in investment preferences could outweigh the benefits. Competitors like Bakkt certainly seem to agree with this assessment.
As the year is coming to a close, it’s becoming increasingly clear that a divide between those favouring crypto adoption, like Senator Bragg and the Commonwealth Bank of Australia, and those opposing it, like central bank officials, is opening up. It will be interesting to see if and how this divide can be reconciled, as Australia needs to swiftly move forward with its regulation plans if the country wants to position itself as a cryptocurrency powerhouse in the future.