Australia’s largest bank CBA to offer crypto trading services
04:33, 3 November 2021
Australia’s biggest bank Commonwealth Bank of Australia (CBA) will offer cryptocurrency trading services to customers through its CommBank app.
The CBA has partnered with cryptocurrency exchange Gemini and blockchain analysis firm Chainalysis to design a cryptocurrency exchange and custody service for its app.
The company said on Wednesday that it will become Australia’s first bank to offer customers cryptocurrency trading services and the pilot for the new service will start in the coming weeks.
CBA is Australia’s largest publicly listed company
CBA, which is Australia’s largest publicly listed company, said it will provide customers access to up to 10 selected crypto assets including Bitcoin, Ether, Bitcoin Cash and Litecoin.
The legitimacy that cryptocurrencies seek from the broader world has seen positive developments in recent months following the approval of bitcoin exchange-traded funds by market watchdog US Securities and Exchange Commission, and El Salvador’s bitcoin adoption.
“We believe we can play an important role in crypto to address what’s clearly a growing customer need and provide capability, security and confidence in a crypto trading platform,” said CBA CEO Matt Comyn in a statement.
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Financial institutions to play integral role
In response to CBA’s announcement, Michael Saylor, founder and CEO of US-based tech firm MicroStrategy, tweeted “Soon every bank will need to support #Bitcoin to remain competitive.”
According to MicroStrategy’s third-quarter earnings report, the company held about 114,042 bitcoins worth $7.18bn, as of bitcoin price of over $63,000 on Wednesday.
“Financial institutions like CBA play an integral role in growing cryptocurrency adoption safely,” said Chainalysis CEO Michael Gronager.
CBA shares inch higher
CBA said its partnership with Chainalysis will help compliance teams monitor and mitigate the threat of crime through crypto-asset exchanges.
The company added that it will progressively roll-out more cryptocurrency trading features to customers in 2022.
Shares in CBA rose 0.7% to AUD106.45 on Wednesday.
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The difference between stocks and CFDs
The main difference between CFD trading and stock trading is that you don’t own the underlying stock when you trade on an individual stock CFD.
With CFDs, you never actually buy or sell the underlying asset that you’ve chosen to trade. You can still benefit if the market moves in your favour or make a loss if it moves against you. However, with traditional stock trading you enter a contract to exchange the legal ownership of the individual shares for money, and you own this equity.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade to open a position. But with traditional stock trading, you buy the shares for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks.
CFDs attract overnight costs to hold the trades, (unless you use 1-1 leverage) which makes them more suited to short-term trading opportunities. Stocks are more normally bought and held for longer. You might also pay a stockbroker commission or fees when buying and selling stocks.
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