Bitcoin and other cryptocurrencies differ from traditional electronic payment systems in that they do not require a third-party intermediary such as a bank. Rather, cryptocurrencies operate through a decentralised peer-to-peer blockchain network with participants communicating directly with each other. The peer-to-peer network of participants takes the place of the third-party intermediary.
Like it or not, blockchain and cryptocurrency are here to stay in Australia and around the world. Investment demand is too strong to ignore. Governments, banks, and regulators must get on board quickly as decentralised organisations sidestep financial institutions.
The treasury is now working with regulators to try and find a way to regulate the crypto market. Most cryptocurrencies are not financial products (aside from ETF’s linked to cryptocurrencies) and therefore financial advisers can’t provide advice.
In addition, the treasury is concerned about the use of Bitcoin for illicit transactions.
The commonwealth bank is taking the first step among its financial peers by allowing customers to use cryptocurrencies through its banking app. No doubt, the other banks will follow suit.