There Are “Bigger Risks in Not Participating” in Crypto, says CEO of Australia’s Biggest Bank
Matt Comyn, Chief Executive Officer of Commonwealth Bank of Australia, says one of the most significant risks banks face regarding cryptocurrencies is FOMO, being left out of the market.
While crypto assets are “very volatile and speculative,” banks need to trade them due to the insatiable demand from customers and be involved in the adoption of blockchain technology.
“We see risks in participating, but we see bigger risks in not participating,” said the CEO of Australia's biggest bank in an interview with Bloomberg Television in Sydney.
Earlier this month, the baking giant said it would allow its 6.5 million customers to hold and use cryptocurrencies.
“We believe we can play an important role in crypto to address what's clearly a growing customer need.”
CBA also bought a small stake in cryptocurrency exchange Gemini which is currently seeking funding at a $7 billion valuation. The banking giant is partnering with Tyler, and Cameron Winklevoss founded exchange to offer its customers safe storage for their cryptos.
The bank doesn't have a view on the asset class itself,
“but we also don’t think that the sector and the technology is going away anytime soon. So we want to understand it, we want to provide a competitive offering to customers with the right disclosures around risks.”
Commenting on a central bank digital currency (CBDC), the CBA CEO said it is “important that Australia is building capability and piloting different versions of the future,” and it is also something that they would “like to participate in.”
As for inflation, which is driving demand for crypto, Comyn sees high inflation persisting for “many years,” but at the same time expecting “strong economic growth” next year combined with a very low unemployment rate.
Consumer prices rose 2.1% from July to September, but Reserve Bank of Australia Governor Philip Lowe isn’t stressed about it and wants to observe inflation remain in the bank’s target zone of 2% to 3%. According to him, it needs to be “3-point-something percent to sustain inflation around the middle of the target band.”
In a speech on Tuesday, Lowe said he doesn't see that happening before the end of 2023.
The RBA hasn’t ruled out hiking rates before that either, but Lowe said the first increase might not come before 2024. His term expires in just under two years.