Australian Banks to Tighten Cryptocurrency Supervision

The Australian Advisory Regulatory Administration has required local banks to increase oversight of the crypto industry. About it writes edition of The Australian Financial Review, citing sources close to the regulator.

It is reported that banks are now required to check crypto businesses for compliance with solvency requirements on a daily basis. Financial institutions must send inspection reports to the regulator. Experts interviewed by the publication admitted that such tightening would hit the fintech market. According to experts, the increased threshold for entering the banking sector for startups will also affect the region’s innovations.

Representatives of the Australian banking sector said in a commentary to the publication that the crypto business in the region remains insignificant in scale. However, its funding is supported through offshore banks, not Australian institutions, the sources added. However, this does not mean that banks have decided not to tighten their supervision too much.

The founder of an unnamed startup told the publication that the Australian market had become unsuitable for attracting investment. Local banks have not only raised the bar, but also failed to explain the rules that startups must adhere to in order to enter the Australian market, the source said.

The tightening of the Australian banking sector may be a response to the recent collapse of three banks in the US and one in Switzerland. However, at the same time, Australian banks are preparing for a possible sweep of the local market before the launch of a digital currency from the Central Bank (CBDC).

• The editors previously wrote that the two largest Australian banks ANZ Group and Commonwealth Bank of Australia were included in the list of a pilot project to study CBDC. It is expected that as part of the testing, the parties will find out how the CBDC can (and if it can) bring economic benefits to the country.
• According to Sophie Gilder, a top manager at Commonwealth Bank, the bank wants to explore the scenario of tokenization of real assets and payments through smart contracts. Also, the Reserve Bank of Australia intends to test pension payments in CBDC, offline payments and tokenization of carbon credits. The test results will be presented to the public in mid-2023.