Shalini Nagarajan

Australia&#8217;s top bank by assets, Commonwealth Bank (CBA), is enhancing customer protection aimed specifically at payments to crypto exchanges.



Starting Thursday, the bank will either reject or temporarily withhold specific payments made to crypto trading platforms.&nbsp;



CBA will also implement a monthly limit of A$10,000 ($6,664) for customer payments intended for purchasing cryptocurrencies from exchanges.



James Roberts, general manager of group fraud management services at the bank, said in a <a href="https://www.commbank.com.au/articles/newsroom/2023/06/changes-on-payments-to-crytocurrency-exchanges.html" target="_blank" rel="noreferrer noopener">statement</a>:



“With the incidences of scams increasing and in many cases customers suffering significant losses from being scammed, the introduction of 24-hour holds, declines and limits on outbound payments to cryptocurrency exchanges will help reduce both the number of scams and the amount of money lost by customers.”



The move follows CBA’s <a href="https://www.commbank.com.au/articles/newsroom/2023/05/namecheck.html" target="_blank" rel="noreferrer noopener">announcement</a> that it would share its NameCheck anti-scam technology with government organizations and other financial companies involved in payment processing in Australia. The purpose is to collectively combat scams and fraud.



Last month, another Australian bank, Westpac, <a href="https://www.westpac.com.au/about-westpac/media/media-releases/2023/18-May/" target="_blank" rel="noreferrer noopener">initiated a trial of new customer safeguards</a> for certain cryptocurrency payments in order to minimize losses resulting from scams. Westpac&#8217;s list of &#8220;high-risk&#8221; exchanges reportedly <a href="https://blockworks.co/news/binance-halts-australian-dollar-deposits" target="_blank" rel="noreferrer noopener">included Binance</a> among the crypto platforms.



At the same time, Binance Australia notified users that it would suspend specific Australian dollar deposits.



Australia is currently grappling with the regulation of cryptocurrencies. The Labor government has recently put forth proposals to enhance enforcement measures.



However, government documents obtained through Freedom of Information laws suggest <a href="https://treasury.gov.au/sites/default/files/2023-02/foi-3215.pdf">it could take more than a year</a> to establish Australian laws that regulate the crypto industry to protect retail customers.



CBA <a href="https://blockworks.co/news/top-australian-bank-ceases-crypto-pilot-amid-market-downturn-report" target="_blank" rel="noreferrer noopener">stopped a landmark trial program</a> last year that briefly let some users buy cryptocurrencies including bitcoin, ether and some DeFi tokens within its own banking app.



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Australian Bank Won’t Let You Buy More Than $7K Crypto Per Month

Sebastian Sinclair

<div id="highlights-block_6287d09d83de8" class="highlights">
 <ul>
 <li>Despite an &#8220;overwhelmingly positive&#8221; reception of the app&#8217;s crypto feature, CBA has walked back its decision, citing volatility following Terra&#8217;s collapse</li>
 <li>The bank had previously partnered with Gemini and Chainalysis to integrate its services to the bank&#8217;s native app</li>
 </ul>
 
</div>



Australia&#8217;s largest bank by total assets has shuttered the rollout of a pilot that had briefly allowed select users to make in-app crypto purchases.



According to a report by <a href="https://www.theguardian.com/australia-news/2022/may/19/commonwealth-bank-pauses-in-app-cryptocurrency-trading-after-market-turmoil" target="_blank" rel="noreferrer noopener">The Guardian</a> on Thursday, the Commonwealth Bank (CBA) has decided to pause the pilot and has given no timeframe for when the program will resume.



The bank became the <a href="https://www.commbank.com.au/articles/newsroom/2021/11/CBA-to-offer-crypto-services.html" target="_blank" rel="noreferrer noopener">first major financial institution</a> in the country to allow certain customers to make in-app purchases through the CommBank banking app in November. Customers had previously been allowed to make purchases of up to ten cryptocurrencies, including bitcoin and ether.



As part of the project, CBA partnered with Gemini to leverage its crypto exchange and custody service which was integrated into the app via APIs. Blockchain analytics firm Chainalysis also participated in the project, offering to assist the bank&#8217;s compliance teams monitoring for crypto crime.



Despite the pilot&#8217;s “<a href="https://cms.blockworks.co/commonwealth-bank-says-crypto-already-mainstream/" target="_blank" rel="noreferrer noopener">overwhelmingly positive</a>” reception and popularity, current market woes – including the disruption caused by <a href="https://cms.blockworks.co/terra-collapse-could-spell-end-for-algorithmic-stablecoins/" target="_blank" rel="noreferrer noopener">Terra</a> last week – have formed a major part of the bank&#8217;s decision to halt its crypto services.



Blockworks attempted to contact Chainalysis, Gemini and CBA but did not receive a reply by press time.



<blockquote class="wp-block-quote">“We want to continue to play a leading role in providing input into that and shaping the most appropriate regulatory outcome,” CBA&#8217;s chief Matt Comyn said in the report. “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.”</blockquote>



Comyn said at the time of the pilot&#8217;s launch that he believed his institution would play an &#8220;important role&#8221; in a bid to meet growing demand from roughly 900,000 customers keen to invest in the nascent asset class.



Australia is slowly driving forward with its crypto regulation having <a href="https://cms.blockworks.co/australia-seeks-licensing-of-crypto-exchanges-via-digital-services-act/" target="_blank" rel="noreferrer noopener">proposed legislation</a> to introduce a licensing regime as well as measures relating to custody, decentralized autonomous organizations (DAOs) and taxation. Given the country&#8217;s federal election on Friday – which may decide on an entirely new government – regulation for the budding market could very well be thrown into doubt.



Some regulators are attempting to head the matter off having <a href="https://cms.blockworks.co/australian-regulators-advance-countrys-crypto-rules-in-latest-guidance/" target="_blank" rel="noreferrer noopener">issued guidance</a> to businesses dealing with crypto assets late last month. Two weeks earlier, chair of the Australian Prudential Regulation Authority Wayne Byres also cautioned banks to <a href="https://cms.blockworks.co/australian-regulator-asks-banks-to-proceed-with-care-over-crypto/" target="_blank" rel="noreferrer noopener">proceed with care</a> – despite crypto not being the only industry to be suffering headwinds caused by economies worldwide grinding to a halt.



Global equities markets continue to face significant sell-side pressure caused by macroeconomic factors including rising inflation and lifting of interest rates designed to combat it. Crypto has been unable to avoid that contagion having suffered significant <a href="https://cms.blockworks.co/bitcoin-hit-hard-by-inflation-fears-suffers-worst-daily-drop-since-january/" target="_blank" rel="noreferrer noopener">sell-offs</a> in recent months.



“As events of the last week have reinforced, it is clearly a very volatile sector that remains an enormous amount of interest,&#8221; Comyn said referencing the fallout from the Terra saga. &#8220;But alongside that volatility&#8230;you can see there is a lot of interest from regulators and people thinking about the best way to regulate that.&#8221;



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Top Australian Bank Ceases Crypto Pilot Amid Market Downturn: Report

<div id="highlights-block_62392567a347d" class="highlights">
 <ul>
 <li>CBA&#8217;s managing director of blockchain and digital assets said feedback over the ability to buy crypto via the Commbank app had been &#8220;overwhelmingly positive&#8221;</li>
 <li>Ten cryptoassets are currently available for purchase on the bank&#8217;s app, including bitcoin and ether</li>
 </ul>
 
</div>



Australia&#8217;s largest bank by total assets has experienced a significant uptake of crypto activity on its app since it first allowed users to buy and sell digital assets last year.



Speaking on the first day of Blockchain Australia’s five-day Blockchain Week conference in Sydney, Commbank&#8217;s Sophie Gilder, managing director of Blockchain and Digital Assets, said the response to the bank&#8217;s app had been &#8220;overwhelmingly positive.&#8221;



The reception of its app follows Commbank&#8217;s 2019 issuance of <a href="https://www.commbank.com.au/guidance/newsroom/world-bank-and-cba-blockchain-bond-201905.html#:~:text=The%20International%20Bank%20for%20Reconstruction,recorded%20using%20distributed%20ledger%20technologies." target="_blank" rel="noreferrer noopener">blockchain bonds</a> via secondary market trading and marks a significant step in the country toward user adoption of the underlying technology.



Gilder, along with several other representatives from Macquarie, Visa and JPMorgan, said business decisions around crypto products were being driven largely by consumers in a &#8220;rapidly evolving&#8221; environment.



<blockquote class="wp-block-quote">&#8220;About 900,000 of our customers have transferred money to crypto exchanges over the last two years,&#8221; Gilder said. &#8220;One in three Australians have a banking relationship with CBA. So we see this activity happening, our customers are already there, already in this space. You can say it&#8217;s already mainstream based on our stats.&#8221;</blockquote>



Gilder also said that while the feedback had been generally positive, the bank app&#8217;s biggest complaint came from customers who had not yet been let into the pilot.



CBA announced back in November it would be launching its crypto <a href="https://www.commbank.com.au/articles/newsroom/2021/11/CBA-to-offer-crypto-services.html" target="_blank" rel="noreferrer noopener">pilot program</a>, granting select customers the ability to buy, sell and hold digital assets directly through the bank&#8217;s CommBank app. After launching in December, the bank became the first of its kind in Australia to offer crypto products directly to its customers.



To assist in the app&#8217;s design and custody service, crypto exchange Gemini and blockchain analysis firm Chainalysis were brought in. Ten cryptoassets are currently available for purchase, including bitcoin and ether.



Chainalysis&#8217; suite of tools allows the bank to &#8220;analyze exactly what&#8217;s happening on the blockchain,&#8221; Gilder said. &#8220;Five years ago, you may not have had that level of confidence.&#8221;



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