There has been no shortage of big crypto headlines in the past week or so. Singapore-based Sunil Kaushik from top global crypto exchange Gemini gave Stockhead his take on some of the latest hot topics in the space…
The Commonwealth Bank’s move into crypto
Last week, the huge news broke that CBA, Australia’s largest bank, announced a partnership with Cameron and Tyler Winklevoss’ Gemini Exchange and blockchain analysis firm Chainalysis to offer a crypto exchange and custody service for its Commbank users.
As reported by Stockhead, CBA will provide its 11 million+ customers with access to up to 10 selected crypto assets: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Uniswap, Chainlink, Polygon, Filecoin, Aave and Compound.
What’s Gemini’s view on the partnership’s significance?
“While I think we’re no longer in the ‘Wild West’ days of crypto, much more needs to be done to evolve the crypto industry even further,” Gemini’s Sunil Kaushik told Stockhead. “This partnership is a big step forward and will enable Australians to access digital assets in a familiar way.”
And does Gemini expect other Aussie banks to follow? ANZ, for instance, hinted it’s interested in participating in the crypto space…
“When a respected institution like the CBA enters the crypto market, there are expectations for other financial institutions in the country to provide similar opportunities for their customers to access crypto. Additionally, this further provides legitimacy of this asset class and sends a message to the public that crypto is here to stay.
“The popularity of digital assets is not declining any time soon, and as more Australians get involved in the crypto market, we can certainly expect to see even more institutions entering it as well.”
Crypto ETFs now on the ASX and Chi-X
The Australian Securities and Investment Commission (ASIC) has reportedly now given the green light for Bitcoin “spot” exchange traded funds (ETFs).
Meanwhile two other Aussie crypto-focused ETFs – BetaShares CRYP and Cosmos Asset Management’s DIGA – are already trading on the ASX and Chi-X respectively.
In fact, last week, the ASX:CRYP ETF, which tracks listed companies in the crypto economy, enjoyed the most successful launch in ASX history.
Thoughts on this one, Sunil?
“It’s exciting. Not only for the crypto industry in Australia, but globally. Australian investors now have an opportunity to benefit from the growth of the blockchain economy.
“This disruptive technology is still in its nascency, but this listing absolutely puts Australia at the forefront of the blockchain revolution.”
Positive regulatory proposals for the Aussie crypto industry
Liberal Senator Andrew Bragg and the Select Committee on Australia as a Technology and Financial Centre recently created a list of recommendations to the Australian government regarding crypto regulation.
Among other things, the committee proposed the following:
• a market-licensing framework for digital currency exchanges
• a token-mapping exercise to characterise various types of digital assets
• capital gains tax for digital asset transactions only to be incurred when they result in a clearly definable capital gain or loss.
If these proposals were to be implemented, what sort of impact do you think they’ll have on the local crypto industry?
“The report overall sends a very positive message about the Australian government’s interest and commitment to regulate crypto,” said Kaushik, adding:
“I see an impending transformation in Australia’s crypto landscape and am confident the government will proceed with the establishment of a proper market licensing regime in the near future.
“I think the token-mapping recommended in the report could be the first act, while clarifying tax obligations for cryptocurrencies might then follow.”
But… what about US and UK government views on crypto?
The Bank of England’s Deputy Governor, Jon Cunliffe, recently delivered a stark warning about a potential “crypto collapse” and reiterated the central bank’s calls for particularly strong regulation in the space.
Meanwhile, doubt remains about how elements of the Biden government intends to treat the crypto industry as a whole, but in particular decentralised finance and crypto mining.
The last-minute amendment to the US$1 trillion infrastructure bill, regarding crypto taxation and the definition of crypto “brokers”, is not exactly a positive development for the industry in the US, but apparently won’t come into effect as law, as things stand, until 2024.
It’s also unclear at this point, exactly how these potentially industry-curtailing regulations would be enacted.
So what’s Gemini’s stance on crypto regulation, and how does it see things playing out globally and in Australia?
“America is, of course, hugely influential, but neighbouring countries such as Singapore already have proper and formal regulatory frameworks,” said Kaushik. “These frameworks from other crypto-friendly nations can be adopted by Australia to facilitate ease of entry for market participants, and allow the industry to grow even further.”
Regulating the crypto industry is necessary to help it grow – is that the general consensus at Gemini?
“Well I think if the crypto market in Australia and across the globe are to grow even further, more government oversight is needed, yes. Regulations would benefit the market tremendously by establishing crypto as a mature asset class, and significantly reducing the number of non-compliant firms.
“Regulation is vital for the growth of the industry in Australia and globally. In the meantime, Gemini remains committed to working with regulators to establish regulation that will promote positive and fair outcomes for all.”
Based in Singapore, Sunil Kaushik (above) is the Senior Principal of Business Development at Gemini, and has previously worked as a senior executive with Goldman Sachs and Barclays Bank.