What does it mean for banks like CommBank and CommSec brokerage as Bitcoin and other cryptocurrency trading grow in popularity?
Bitcoin Trading – The Basics
Bitcoin is a form of digital or cryptocurrency, meaning there’s no physical form for it as there is paper money for checking and savings accounts. The government does not regulate it either. You can also use Bitcoin as you would use typical cash.
However, trading Bitcoin has grown in popularity to make money rather than spending it like regular money. Trading the cryptocurrency involves watching the market prices and speculating when the prices will rise so you can buy and sell accordingly to make a profit.
Although the currency is digital, you still need a bank to hold your funds, liquidate your profits, and complete trades.
Do Banks & Brokerage Allow Bitcoin Trading in Australia?
While not illegal, banks in Australia remain wary of adopting the blockchain technology for Bitcoin because of the potential high-risks and illicit reputation. Bringing a Bitcoin exchange to a bank can in itself prove risky as banks in the continent have displayed somewhat biased opinions on the matter.
For example, a Bitcoin trader registered his exchange with Westpac and ANZ, who then closed the accounts claiming fraudulent activity. Another payment platform in Australia, the New Payments Platform Australia (NPPA), is currently taking legal action against the cryptocurrency brand Ripple Labs for mimicking a trade form they had in place.
Ultimately, trading Bitcoin and other cryptocurrencies isn’t illegal in Australia, but it is not trusted or supported by the banks. When dealing with cryptocurrency, it’s safer to find an alternative banking solution such as Wirex, Change Bank, Bankera, or Revolut, to name a few.
Besides banking options, you can register with a crypto exchange such as CoinJar, Binance, or Swyftx to store, sell, buy, and trade your Bitcoin or other digital currencies.
Can You Buy Bitcoin Through CommBank?
If you want to buy Bitcoin via CommBank, you can’t use a credit card. CommBank, in response to the high-risk potential for Bitcoin and the unregulated nature of cryptocurrency, has blocked associated credit card purchases. Instead, CommBank customers may use their debit cards or other transactional accounts to buy and sell Bitcoin if they comply with the rules and regulations.
However, CommBank may block purchases with the alternative modes if it doesn’t adhere to the rules and regulations, has been marked fraudulent, is no longer accepted in the currency exchange, or for security reasons.
What Sort of Transaction Fees is Expected with CommSec Brokerage?
The good news? There is no fee for trading Bitcoin with CommSec. The bad news? There’s no fee because CommSec does not support cryptocurrency trades for Bitcoin and the like. As of 2020, CommSec no longer offers cryptocurrency trading for Bitcoin, Ripple, or others.
Will CommBank or CommSec Brokerage Block Your Account for Aggressive Bitcoin Trading?
Because of all of the uncertainties with cryptocurrency trading, reputation, and volatility, many banks such as CommBank have placed specific rules and regulations on Bitcoin trading. With those regulations, CommBank will monitor Bitcoin trading closely, ensuring it adheres to the guidelines.
With close eyes on the trade, CommBank has the right to block or freeze accounts if it feels they exhibit unusual behavior. For example, CommBank recently locked the accounts of a registered trader with roughly $250,000 AUD in cryptocurrency because it thought the trader was participating in fraudulent activity.
Does CommBank and CommSec Brokerage Support Other Alternative Crypto Currency Instead of Bitcoin?
CommSec, while this is subject to change, does not support the trade or purchase of any cryptocurrency as of 2020. CommBank, on the other hand, supports cryptocurrencies such as Bitcoin and Ethereum with limitations per their rules and regulations. CommBank has recently partnered with Ripple.
Ripple, while similar to Bitcoin, works exclusively for institutional use. The partnership will provide CommBank with a competitive edge over banks that don’t offer any form of cryptocurrency support. The partnership will potentially give customers faster, more economical services.
Conclusion – The Reality of Banking with Crypto
Ultimately, Banks in Australia remain skeptical of the cryptocurrency exchange because it isn’t regulated, is highly volatile, and has an illicit reputation. While it is possible to purchase and sell Bitcoin and alternative digital currencies through some banks such as CommBank, the institution keeps a close eye on the accounts and can lock them as they see fit.
CommBank, and other banks Australia, generally discriminate against cryptocurrency accounts because of all the uncertainty associated with them. Although, markets always change and the newer partnership between CommBank and Ripple may possibly lead to a widespread acceptance of cryptocurrency trading.