Australia’s Largest Bank Suspends Pilot Phase for Banking App

The increased uncertainty across the cryptocurrency space has triggered panic among investors. With volatility being high, regulators have turned their attention towards the space, triggering a reverse in decisions previously made about the sector.

The largest bank in Australia, the Commonwealth Bank, has suspended the trial phase for a planned crypto trading. The bank has not mentioned when the service would be restored.

Commonwealth Bank of Australia halts crypto services

A report by the Guardian Australia on May 19 said that the CEO of the bank, Matt Comyn, had confirmed the suspension of the bank’s crypto plans. Comyn noted that the bank was still processing customer feedback and that regulations were needed before moving on the next phase.

The bank first announced its cryptocurrency plans in November last year. It said it would collaborate with the Gemini cryptocurrency exchange and Chainalysis to launch the new feature on its banking app. The app would allow users to buy, sell and hold cryptocurrencies like Bitcoin and Ether.

Besides rolling out crypto trading on its banking app, the bank had said that more cryptocurrency services would be unveiled in 2022. Despite these plans, the Australian Securities and Investment Commission (ASIC) has failed to approve the bank’s product, saying that the institution needed to comply with several set rules.

The suspension of the bank’s trading app trials also comes amid the collapse of Terra’s UST stablecoin. The collapse caused a plunge in the entire market, as billions of dollars were liquidated from the market within a few days.

“As events of the last week have reinforced, it is clearly a very volatile sector that remains an enormous amount of interest. But alongside that volatility and awareness and I guess the scale, certainly globally, you can see there is a lot of interest from regulators and people thinking about the best way to regulate that,” Comyn said.

Crypto regulations in Australia

Comyn also added that the bank wanted to contribute to the regulatory framework for the crypto sector in Australia. “Our intention still, at this stage is to restart the pilot, but there is still a couple of things that we want to work through on a regulatory front to make sure that that is most appropriate.”

In December last year, the Australian government announced it would change the crypto regulatory framework and transform the country into a primary hub for cryptocurrency activities.

Australia’s federal treasury is also holding consultations on crypto regulations, and it has also invited comments from the public. Additionally, the Australian Taxation Office (ATO) announced it would focus on crypto taxes this fiscal year.

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