Executives at two of Australia’s “big four” banks have ruled out allowing retail customers to trade cryptocurrency on their platforms, with one reasoning that customers don’t understand “basic financial well-being.”
Speaking at the Australian Financial Review Banking Summit on Tuesday Maile Carnegie, executive for retail banking at Australia and New Zealand Banking Group (ANZ), said that from speaking to retail customers, she believed “the vast majority of them don’t understand really basic financial well-being concepts.”
“Are we really going to make it easier and less friction and implicitly endorse speculating on crypto when they don’t understand basic financial well-being? The answer was no.”
Carnegie said ANZ had considered a cryptocurrency product from as early as 2017, adding she was “happy we didn’t go head long” into the offering.
Also attending the summit was Angela Mentis, chief digital officer of National Australia Bank (NAB), who was asked if NAB would consider offering crypto trading. She answered “not in the foreseeable future and not for retail” but added there are already applications for blockchain technology for institutional clients.
In March, ANZ became the first bank in Australia to mint an Australia dollar (AUD) pegged stablecoin called A$DC, and NAB is also gearing up to launch its own stablecoin, which is expected to be operational by the end of 2022.
Both stablecoin projects from the big banks will initially be offered to institutional clients seeking an on-ramp for crypto investments. The pilot transaction of A$DC, for example, was a 30-million-AUD transfer.
The only big four bank with plans to launch a retail crypto trading product is the Commonwealth Bank of Australia (CBA). At the summit, its CEO, Matt Comyn, said despite facing challenges, it was still its “intent” to launch the service.
The CBA revealed plans to enable crypto trading in November 2021 by partnering with the Gemini crypto exchange, with limited trials beginning shortly after. But in April, news emerged that the Australian Securities and Investment Commission had tied up the launch with regulatory red tape, citing concerns about consumer protections, which prompted the CBA to start planning a second pilot of the product.
In late May, the CBA put its plans for the second pilot on hold indefinitely and cut off crypto trading to those in the first round of testing, with Comyn saying at the time the bank was still waiting on regulatory clarity.
At the summit, Comyn added that if it were to proceed with the offering, the bank would look to restrict trading to those “who understand the risky asset class.”
Hitting back at the comments from the banking executives, Ian Love, founder and CEO of crypto investment firm Blockchain Assets, tweeted:
“How will we ever reduce wealth inequality when our regulatory system has financial discrimination at its core? It’s time to remove the ‘Sophisticated Investor’ discrimination rules that advisors use to hide behind and allow everyone access to financial advice and services.”