The CBA is preparing to pay interest on crypto accounts as part of their new customer loyalty program, which will launch this year.
Leading Australian banks, Commonwealth Bank of Australia (CBA) and New York-based crypto services provider Gemini are planning to launch a “crypto interest account” to Australian customers whereby the bank initially would pay interest on the crypto holdings in the account.
The Commonwealth Bank of Australia (CBA) is the largest bank in Australia and is one of the leading financial institutions in the world. Last month, CBA became the first bank in Australia to offer crypto to its customers. Now, this bank is moving to provide customers with the ability to earn interest on their cryptocurrency.
Recently Gemini, the New York-based cryptocurrency exchange, announced that it had partnered with CBA to offer clients a new way to invest in cryptocurrencies. The partnership also includes CBA investing in Gemini’s first external fundraise.
There is a revolution happening in the financial industry. More and more banks are accepting cryptocurrency as currency and a means of payment. This is largely due to the rise of blockchain technology, which has transformed the way that trust works. Cryptocurrencies offer financial institutions an effective way to solve fraud in their system by providing transparency through decentralization and security through cryptography.
It’s unclear how authorities will react to CBA’s crypto interest product. They’ll probably get advice from Gemini, which is one of the most strictly regulated firms in the market as a New York-registered exchange. Suppose it works like Gemini’s offshore offering. In that case, you may anticipate depositors’ crypto to be loaned to institutional investors and customers to be charged varying rates for different cryptos, based on demand and usage.