Australia’s Largest Bank to Offer Bitcoin Services
CommBank, Australia’s largest bank, announced yesterday that it would offer Bitcoin services. Customers will soon easily buy, sell and hold Bitcoins via the CommBank app. If you don’t have a CommBank account you can use bitcoin-code.live to buy or sell Bitcoins.
Commbank is the first bank in Australia to offer such Bitcoin services. The pilot for the first customers will start in the coming weeks. If everything goes according to plan, all 6.5 million customers will easily buy Bitcoin through the bank’s platform by early 2022.
Banks and Bitcoin
CommBank is the largest financial services provider in Australia; its customer base consists of companies, individuals, and institutional parties. Its 6.5 million customers account for 25% of the population in Australia. So the step for such a large bank to offer bitcoin is a big one. “Growing customer demand for bitcoin presents both opportunities and challenges for the financial services industry, which has grown thanks to this new technology tremendously,” said Commbank CEO Matt Comyn.
“We trust that we can play a key role in the bitcoin industry. The demand for bitcoin from customers is growing fast. We are going to offer security and trust in the form of a trading platform’, explains Comyn. More and more banks are tackling and deciding to offer bitcoin. For example, the largest bank in the US, JP Morgan Chase, will allow clients to invest in a bitcoin fund. Furthermore, VastBank, BNY Mellon, Morgan Stanley, and US Bank are all engaged in bitcoin management services or investment opportunities.
The bank has entered into a partnership with the exchange Gemini to offer custodial services. Customers can’t send the bitcoin purchased via the Commbank app to their wallet. The bank manages Bitcoin; for some, an easy solution for others, an absolute no-go.
Please read here about the differences between custodial, non-custodial, and self-custodial wallets and their advantages and disadvantages. Commbank also partnered with blockchain analytics firm Chainalysis, which will help the bank monitor suspicious transactions. Transactions on the Bitcoin blockchain are publicly available. Therefore, when it is known that a Bitcoin address is involved in criminal activities, it is possible to monitor that address and track all transactions. In this way, Chainalysis monitors, for example, bitcoin addresses involved in ransomware or hacks on exchanges so that the funds cannot be sold on trading platforms.
Australia abolishes Bitcoin double VAT.
Australia has long struggled with the double taxation of bitcoins. A new bill aims to respond to complaints from the Australian fintech sector, which considers this tax outdated.
For payment with bitcoins, VAT must currently be paid for a purchase. However, in Australia, where bitcoin is not yet recognized as legal tender, VAT is also added to the purchase of the bitcoins themselves. This means that both the purchase of bitcoins and the use when purchasing products are taxed.
The purpose of this law change is to help cryptocurrency-related businesses. These often stayed away or had trouble staying afloat in Australia. Government agencies are increasingly involved with the fintech sector to steer new developments, such as Bitcoin, in the right direction. Now that the draft has been put forward, it remains to be seen until it has passed through the political system and is approved by parliament.
JP Morgan will also offer bitcoin management.
JP Morgan Chase, the largest US bank, plans to let clients invest in a bitcoin fund. It would be an actively managed fund for wealthier clients, to be launched this summer. JP Morgan is following in Morgan Stanley, Goldman Sachs, and BNY Mellon, who have announced similar plans in recent months.
One by one, the dominoes fall. JP Morgan Chase, the largest bank in the United States, plans to offer wealthier clients the opportunity to invest in a bitcoin fund. The investment fund will be launched this summer, according to news site sources. It is an actively managed fund. With a passively managed fund, bitcoins are purchased, but trading is also done to achieve a better return with an actively managed fund. For the management of the bitcoins, JP Morgan would work with the business manager NYDIG.
JP Morgan is the umpteenth bank in a short time to tack. In February, BNY Mellon, America’s oldest bank, also announced integrating bitcoin into their services. A month later, Morgan Stanley said it would offer wealthier clients the opportunity to invest in a bitcoin fund, and Goldman Sachs followed suit with similar plans. A few days ago, the US Bank also announced a bitcoin management service.