In a recent interview with Bloomberg, Matt Comyn, the CEO of Commonwealth Bank of Australia, disclosed what he feels is the primary danger associated with cryptocurrency today.
Comyn said that, given the emergence of digital assets as an alternative investment, the primary danger associated with cryptocurrency is “losing out.” He said that, despite the market’s volatility, banks must seek to incorporate the technology in order to meet customer demand. If this is not done, banks will be forced to exit the market entirely.
Comyn said “We recognise hazards associated with participation, but we believe the risks associated with non-participation are worse.”
The Commonwealth Bank of Australia is the country’s biggest bank, and the CEO’s views on the crypto market come only one day after the bank acquired a tiny interest in US-based cryptocurrency exchange Gemini. Gemini earned a stunning $400 million in its first investment round, valuing the company at almost $7.1 billion. Under the terms of the new collaboration, Commonwealth Bank will function as a custodian for Gemini users.
Volatility in the cryptocurrency market seems to be a secondary concern for large financial giants and organisations that refused to deal with crypto till a year ago. As of today, banking heavyweights such as JP Morgan, DBS Holdings, and numerous others are on a crypto hiring frenzy. Additionally, these banks are creating new crypto-pegged financial products in response to strong customer demand.
“It’s critical to note that we have no opinion on the asset class itself – we consider it as a very volatile and speculative asset,” Comyn said. “However, we do not believe that the industry or technology will disappear very soon. As a result, we want to understand it; we want to deliver a competitive solution to clients that includes the appropriate risk disclosures.”
2021 has established itself as a year of crypto mainstream acceptance, with more traditional businesses expressing interest in integrating crypto or investing in crypto startups. Numerous cryptocurrency startups, like the FTX cryptocurrency exchange, Gemini, Chainalysis, and Blocfi, have raised hundreds of millions of dollars this year alone.
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