Commonwealth Bank of Australia (CBA), the nation’s largest financial institution, announced its ongoing projects in the Web3 space. The bank is particularly experimenting with stablecoins and tokenization to facilitate transactions both locally and internationally.
Stablecoin and Tokenization Projects
Sophie Gilder, CBA’s Director of Blockchain and Digital Assets, revealed at this week’s crypto summit hosted by the Australian Financial Review (AFR) that the bank has been working on crypto-based projects since 2016. One of the most significant experiments involves using stablecoins pegged to the Australian dollar as a fast and cost-effective payment method.
Additionally, the bank is evaluating the use of a local blockchain to process tokenized deposits. This approach could provide a more efficient method for large transactions. Financial giants, from the People’s Bank of China to JPMorgan, are also exploring this area.
Regulations and Barriers to Innovation
While financial regulators are often seen as impediments to the crypto industry, Sophie Gilder from CBA disagrees with this perspective. She acknowledged that regulatory uncertainty presents a significant bottleneck for Web3 innovation in Australia, mainly stemming from politicians’ inaction.
“Regulators typically have good resources to monitor and evaluate existing products, but less for innovative products.”
Gilder emphasized that regulators are bound by current laws and cannot create new laws independently or exceed their authority. Hence, she argued that political will and new legislation are necessary to pave the way for innovation.
“What we need in Australia is political will and the application of laws.”
Looking Ahead at the Crypto Industry
As national election campaigns are expected to begin in 2025, there is curiosity about how politicians will approach the crypto industry. Whether policies and regulations related to the crypto sector will be on the election agenda remains a significant question mark.
Commonwealth Bank’s interest in crypto technologies and initiatives is viewed as an important step for the future of financial technology in Australia. However, for these innovations to gain traction, legal regulations and political will must act in concert. The adoption of crypto technologies can only be achieved through the collaborative efforts of both banks and the government.
