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Commonwealth Bank puts crypto trading process on hold while regulators hesitate

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The Commonwealth Bank of Australia (CBA) has indefinitely put its plans for a second pilot program of crypto trading services on hold, barring access to those in the first round of testing.

CBA sent Cointelegraph a transcript of a bank briefing Tuesday, in which CEO Matt Comyn said he was still awaiting regulatory clarity. He also said that he is “working very closely, as you can imagine, with a number of regulatory bodies on the appropriate treatment of this particular product.”

“Our intention at this point is still to restart the pilot, but there are still a few things we want to work through at the regulatory level to ensure this is most appropriate.”

Comyn said there is already a Treasury Department application for the program under review, but he did not share an expected timeline for its completion.

Comyn said last week’s wild volatility appeared to support the need for an extended delay, even though the second pilot program had been put on hold back in April after financial regulators refused to allow regular banking users easy access to crypto. The Australian Securities and Investments Commission (ASIC) rejected the CBA’s services on the grounds that there were no consumer protections.

He said: “It is clearly a highly volatile sector which remains of tremendous interest.”

“But alongside that volatility and awareness and I think scale, certainly globally, you can see that there is a lot of interest from regulators and people thinking about how best to regulate this.”

Comyn also indicated that the bank is awaiting the result of Saturday’s general election. If a new regime comes to power, it could mean sweeping changes in the crypto regulatory landscape, which Comyn said “will be a focus for the new government to think about.”

Lecturer in Leadership and Entrepreneurship at Swinburne University, Dr. Dimitrios Salampasis, told The Guardian that when it comes to reputational damage, CBA may be slow to move forward.

Considering the recent price drop in crypto markets due to the collapse of Terra (LUNA), Dr. Slampasis that “balancing risk, brand equity and regulatory clarity will be key to minimizing disruption in CBA’s current business model.”

Related: Aussie crypto ETFs have so far rallied $1.3 million in volume on a tough launch day

The CBA became the first major bank in Australia to offer crypto services through its mobile app last November. As the pilot progressed, it promised access to the app’s 6.5 million users after full rollout. As of now, those plans are on hold indefinitely.