What these three experts are saying about the CBA crypto service

More Australian banks are predicted to follow in CommBank’s virtual currency footsteps.

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Commonwealth Bank of Australia (ASX: CBA) yesterday broke new ground when it announced it will begin offering crypto services to its customers.

CBA’s crypto service will allow customers to trade and hold up to 10 selected cryptos, including big names like Bitcoin (CRYPTO: BTC)Ethereum (CRYPTO: ETH), Bitcoin Cash (CRYPTO: BCH) and Litecoin (CRYPTO: LTC).

I reported on CBA’s crypto plans yesterday. You can find that article here.

Today we turn to 3 industry experts for their take on what this means for Aussie investors and CommBank’s competitors.

CBA crypto service likely to increase Aussie adoption

Asked about the wider implications of CBA’s new crypto service, Darren Abrams, managing director of Aus Merchant Investments, told The Motley Fool:

CBA’s announcement is further validation of the legitimacy of this nascent asset class. Globally, there has been a paradigm shift amongst reputable incumbents in the retail and investment banking industry. Many have formally acknowledged the validity of this asset class and have since started providing a plethora of digital asset services. This zeitgeist will inevitably increase adoption amongst Australian individuals and institutional investors.

Ian Lowe, CEO of global crypto platform Dacxi, had a somewhat different take, saying, “It’s tempting to call CBA’s crypto move one that ‘legitimises’ the industry, but there are few people left who don’t believe that cryptocurrency should play some role in your investment portfolio.”

Lowe continued:

What it does do is lower the learning curve to investing significantly – particularly for those in older cohorts who are looking to manage their own wealth. This is undoubtedly a good thing. We’re undoubtedly going to see more of these collaborations between the Australian banks and major cryptocurrency exchanges as they adapt to consumer demand.

Jonathon Miller, managing director Australia of cryptocurrency exchange Kraken said:

It’s a big turnaround from a major bank, particularly as we saw many big banks criticised during the Senate Select Committee on Australia as a Technology and Financial Centre for their antagonistic nature towards the cryptocurrency industry and the conflation between de-banking and blockchain. We welcome this [crypto] pivot from CBA and hope it brings more support for the burgeoning Australian cryptocurrency and blockchain sector.

What’s next for investors’ crypto access Down Under?

Abrams told The Motley Fool the new CBA crypto service is likely to see other Aussie banks enter the virtual currency space.

According to Abrams:

I believe other banks will follow suit. Providing digital asset services will be an incredibly lucrative new revenue stream for banks. As digital assets become a growing interest for Australians, these publicly trading banks have a fiduciary obligation to shareholders and will eventually need to meet growing demand for crypto trading.

“I can’t foresee a cogent rationale for them not to provide these services. They will risk getting left behind,” he added.

Lowe stressed the importance for retail investors to educate themselves about Bitcoin, Ether and other cryptos. And not to forget the golden rule of diversification:

What we need to see next is education on how to package these assets up correctly. Nobody in their right mind would suggest you expose yourself to the technology sector by only investing in one technology stock. It’s the same with cryptocurrencies…

But getting the right information on cryptos remains tricky today. Lowe explained:

Education is inherently more difficult in cryptocurrency, not only from a sheer complexity standpoint, but also who do you trust for your information? There is far less certainty here than in the world of traditional assets. Cryptocurrency is legitimate, the new frontier is in making it accessible to everyone.

Miller agreed that investors should take the time to be as well informed on the crypto markets as they can, saying “It’s important consumers do as much research as possible and seek out the best service to allow them to take control of their crypto assets.”

However, Miller offered the reminder that Aussie investors looking to buy and hold onto Bitcoin or altcoins aren’t limited to the new CBA crypto service.

“Blockchain technology allows users to safely withdraw and hold their crypto directly,” he said. “It is open source technology and users should be aware that they are not restricted to platforms that lock up their assets such as CBA’s [crypto] offering.”

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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