CommBank, Australia’s largest bank, announced yesterday that it would offer bitcoin services. Customers will soon easily buy, sell and hold bitcoin via the CommBank app. 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.
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Banks and bitcoin
CommBank is Australia’s largest financial services provider; 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.
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 manages Bitcoin; for some, an easy solution for others an absolute no-go. Please read 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.
Colombia’s largest bank to offer bitcoin
Account-holders of, Bancolombia can now buy and sell Bitcoin quickly. The Colombian government has started a pilot to test whether banks can offer new services collaborating with bitcoin service providers. Stock market watchdog Financial Superintendence of Colombia (SFC) has selected nine trading platforms for the project, including Gemini and Binance.
Bitcoin adoption in Africa is growing fast
Thanks to peer-to-peer platforms, the number of bitcoin users is growing worldwide, including in Africa. Although the African bitcoin economy is small compared to other continents, bitcoin adoption among ordinary people is high. Peer-to-Peer platforms play an essential role in this, partly due to bank regulations.
The bitcoin economy in Africa has increased in the past year. More than 100 billion dollars was sent to the continent via bitcoin, a 1200% growth compared to the previous year.
Adoption among common people
Compared to other continents or countries, the institutional adoption of bitcoin in Africa is disappointing. On the other hand, ordinary people make extensive use of digital currency compared to other countries. Seven percent of bitcoin’s transaction volume in Africa comes from retail investors. It is more than the global average of 5.5%.
Most of these trades are made through peer-to-peer platforms. These are websites or apps where individuals trade bitcoin directly with each other, without traditional financial institutions such as banks. Examples of such platforms are the bitqs.online and Paxful.
The popularity of such platforms is due to new laws and regulations in some countries. Governments and central banks in Nigeria and Kenya, for example, have banned commercial bank customers from transacting money with trading platforms. Therefore, the use of platforms where individuals without a significant party find each other to buy and sell digital currency is a suitable alternative.
Africa & Bitcoin
Due to the often financially unstable situation in African countries, bitcoin is rising in the continent. In addition, the transaction costs for sending money with traditional financial institutions are high, often around 8%. With bitcoin, this is a lot less. It is, therefore, a widely used way to receive and send money from abroad. For example, the people of Nigeria receive about 20 billion dollars a year, often coming from Europe or North America.