Tag: australia

Australia’s central bank weighs digital currency, remains unconvinced, BFSI News, ET BFSI

Banking & Finance

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SYDNEY, – The Reserve Bank of Australia, like some other major central banks, has stepped up research into running its own digital currency, but remains unconvinced of the merits, its payments chief said on Thursday.

The comments, made at a financial services conference, follow an Australian Senate report last month that called for laws to be changed in ways that were more amenable to digital currencies.

Most major economies are now considering whether to issue a central bank digital currency (CBDC) – an internet-only cash equivalent that is different to cryptocurrency since it is not de-centralised – although none have done so yet, said Reserve Bank of Australia head of payments policy Tony Richards.

However, “given the possibility that the balance could shift towards a case for issuance of retail CBDCs, the Bank has been stepping up its CBDC research”, Richards said in a speech at the Australian Corporate Treasury Association.

Noting that the European Central Bank and Sweden appeared to be the most advanced of the major economies to consider a role for CBDCs, Richards said the U.S. Federal Reserve was more cautious.

“Reserve Bank (of Australia) staff have also not been convinced to date that a strong policy case has emerged in Australia for a CBDC,” he said.

“Australia’s existing electronic payments system already provides households and businesses with a wide range of safe, convenient and low-cost payment services.”

Amid the rush to internet-only money, which has been spurred along partly by the shift toward online living during the pandemic, Australia’s biggest bank also said this month that it was offering some cryptocurrency trading services via its smartphone app. (Reporting by Byron Kaye; Editing by Simon Cameron-Moore)



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Australia’s banking regulator looks into CBA’s jump into crypto, BFSI News, ET BFSI

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By Paulina Duran

SYDNEY, – Australia‘s banking watchdog said it was examining the regulatory implications of Commonwealth Bank‘s’s planned introduction of bitcoin trading to unsophisticated retail investors – the first bank in Australia to do so.

CBA says it would welcome a clear regulatory framework for crytpocurrencies, which are not formally regulated in Australia.

On Wednesday CBA broke banking industry ranks to match offerings from fintech firms by announcing it will become the first main-street bank in the developed world to offer a platform for retail customers to trade cryptocurrencies.

The move is forcing financial watchdogs in Australia to immediately focus on the volatile $2 trillion crypto trading industry that many argue has no intrinsic value and relies on users’ complete trust in different types of software.

A spokesman for the Australian Prudential Regulation Authority (APRA) told Reuters the country’s largest lender had made the regulator aware of its plans and the authority was “examining regulatory issues that this raises”.

After a staged pilot for 2,000 people, CBA will give easy access to crypto trading in 10 assets to about a third of Australian adults already using its industry-leading mobile banking app, which also offers energy retailers discounts and carbon emission trackers.

CBA’s crypto trading service will be provided in partnership with Gemini Trust Company, one of the world’s largest crypto exchanges that was created in 2014 by the Winklevoss brothers, famous for accusing Facebook’s founder of stealing their idea.

The anti-money laundering watchdog the Australian Transaction Reports and Analysis Centre said that it was “engaging … in relation to this new product offering” with both CBA and Gemini.

CBA says it would welcome regulatory clarity in the space, and that its product was designed with risk-mitigation and regulatory concerns front of mind for both the bank and to ensure people feel safe when using the product.

“We would really welcome regulatory clarity for crypto assets. We think it would improve the market, enhance trust and it would raise the bar in terms of customer protection,” said Sophie Gilder, Commonwealth Bank’s head of Blockchain and the bank’s project leader.

CBA’s offering will be a “a closed loop” connected to a CBA bank account, that would be monitored with cryptocurrency anti-money laundering services from Chainalysis for any potential suspicious activity.

“We’ve got complete transparency as to customer activity and can report on that to regulators when necessary,” Gilder said, which includes customary reporting to the taxation authority.

“We will not, as soon as the pilot ends, open it to everyone. It will be a more gradual process than that, which I think is appropriate considering the volatility of crypto.”

(Reporting by Paulina Duran in Sydney; Editing by Michael Perry)



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Mastercard rolls out buy now, pay later program, BFSI News, ET BFSI

Banking & Finance

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Mastercard Inc unveiled on Tuesday a buy now, pay later (BNPL) program that will allow consumers to pay for online and in-store purchases through equal and interest-free installments.

The Mastercard Installments program will be available in markets across the United States, the United Kingdom and Australia, the company said.

The company also said it will work on the BNPL program with banks and fintech firms, including Barclays Plc’s U.S. unit, Fifth Third Bancorp, Marqeta Inc, and SoFi Technologies Inc, in the United States, and Qantas Loyalty and Latitude in Australia.

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More Indians trust banks with their personal data than US, UK and Australia: Report

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According to the survey data, 68 per cent Indians surveyed said that they trust their banks with personal data.

Data privacy has been questioned many times and it has been noted that many people have been reluctant to give out their personal details. In such times, it was found that more Indians trust their banks while handing out their personal data. The confidence among Indians with banks having their personal data is more than people in nations like the US, UK and Australia, said MoneyTransfers, taking in account data provided by YouGov. The survey was conducted across counties to establish which countries have the most and least trusted banking services.

According to the survey data, 68 per cent Indians surveyed said that they trust their banks with personal data. Similar response (68 per cent) was received from Germany too where people trusted banks. Both countries were placed on the third rank in comparison to other countries as “they believe banks and financial service providers are competent and ethical in their management of personal data.”

The trust factor was found to be higher than in countries like Australia and the US, UK where 57 per cent, 45 per cent and 59 per cent people, respectively, had faith in their banks when it comes to providing personal data.

It is to note that Poland was the top country where 85 per cent of the people have put their trust in banks and financial service providers with their personal data. This was followed by Indonesia, where 70 per cent of people were confident that banks and financial service providers can diligently handle their personal data. Other countries surveyed included China, France, Denmark, Italy, Spain, Sweden, Mexico, United Arab Emirates, Hong Kong and Singapore.

While conducting the survey, people were simply asked if they trust banks and financial service providers with their personal data. More than 2,250 individuals from each country were given the survey questions and asked about their trust in banking services.

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Australians can now receive wages in Bitcoins as crypto acceptance grows, BFSI News, ET BFSI

Personal Finance

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Bitcoin‘s dramatic surge from $22,000 in December 2020 to about $60,000 now is prompting many employed by cryptocurrency firms to take part or entire salaries in bitcoins.

After Miami City Council pledged to pay part of wages in Bitcoins, Australians can now receive a portion of their employment wages in Bitcoin using a new service from Living Room of Satoshi, a leading Australian Bitcoin payments company.

The “Wages” service allows a user to nominate a percentage of their regular pay to be converted to Bitcoin and instantly sent to their Wallet of Satoshi Bitcoin Lightning wallet. Wallet of Satoshi is a free application for iOS and Android, also created by the founders of Living Room of Satoshi, that boasts tens of thousands of active users worldwide.

Living Room of Satoshi

Living Room of Satoshi is an Australian company that enables payment of any bill, or transfers to any bank account, using Bitcoin and other crypto-currencies. Established in 2014, Living Room of Satoshi have facilitated hundreds of millions of dollars in payments and are fully regulated, operating under their own Australian Financial Services Licence.

The company is named in honour of Satoshi Nakamoto, the pseudonymous and mysterious creator of the original Bitcoin software.

Its CEO said with the astronomical rise in prices in the last six months, to provide an option for regular folks in Australia to also join this burgeoning ecosystem. The simplest and most pain-free way is to have a small percentage of your wage converted and sent to you when you get paid, he said.

In India

While there is no major trend of payment in Bitcoins in India, engineers and developers at crypto firms in India are being paid in kind.

Many young engineers and freelancers are accepting payments in cryptocurrency due to the ease of transferring it across borders, lower transaction costs.

With the dramatic surge of bitcoin value, those who accept the pay in such unit have reaped a huge windfall.

The risks

There have been times when thousands of dollars in value have been wiped overnight, and there is no guarantee the price will not continue to fluctuate in the future.

After a huge surge post Coin Base listing, bitcoin is down over 14% from record highs.

Still, there are signs that cryptocurrency has arrived on Main Street.

Growing popularity

Recently Mastercard said it expected to directly support some forms of cryptocurrency on its network in 2021, with one executive claiming that “digital assets are becoming a more important part of the payments world”.

Earlier this year, the City Commission of Miami has pledged its support to a proposal that would allow workers in the city to accept cryptocurrency as part of their salaries in the future.

the city’s mayor, Francis Suarez, said on Twitter that after his resolution was supported by local officials, a suitable vendor will be “procured” to “be able to offer our employees to get a percentage of their salary in Bitcoin (BTC).”

“This allows our residents to pay for fees in Bitcoin, and would also allow the city manager to cooperate with Miami county for taxes to be paid in Bitcoin,” Suarez announced. “This allows our residents to pay for fees in Bitcoin, and would also allow the city manager to cooperate with Miami county for taxes to be paid in Bitcoin,” the city’s mayor, Francis Suarez, the city’s mayor was quoted as saying.

The proposal has also been put forward to the state legislature for allowing BTC to be considered “an acceptable currency for us to potentially invest in, in the future.”



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Top Indian bank drags its feet on billionaire Gautam Adani’s coal loan, BFSI News, ET BFSI

Banking & Finance

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By Suvashree Ghosh, Alastair Marsh and P R Sanjai

India’s largest bank hasn’t decided whether to help finance an Australian coal mine following mounting pressure from climate activists and investors, including BlackRock Inc.

Two senior State Bank of India executives, who asked not to be identified, said the bank was dragging its feet on extending part of a funding line of as much as $1 billion to Adani Enterprises Ltd., which plans to use the money for the controversial Carmichael mine. The bank’s executive committee, which will make the final decision, hasn’t had discussions about the loan this year, the officials said.

The Carmichael mine has been the focus of environmental protests since it was proposed in 2010. SBI shareholders have joined the opposition. BlackRock and Norway’s Storebrand ASA raised their objections over the past year, and Amundi SA divested its holdings of SBI’s green bonds because of the bank’s ties to the Carmichael mine.

SBI Chairman Dinesh Kumar Khara, who took charge in October, is reticent to disburse the funds to Adani given the opposition to the Australian project, bank officials said. Still, no decision has yet been made about the loan, they said.

SBI’s shares were up 0.6% in Mumbai on Friday, the third-best performer among peers in a gauge of 10 lenders that was down 0.5%. Adani Enterprises was up 2.4%.

Adani said in a statement that construction of the Carmichael Mine is “well underway and we are on track to export” coal in 2021. The company added that its mine and rail projects are fully funded.

Spokespeople for SBI haven’t responded to emails seeking comment.

The Adani loan has left SBI, which is majority-owned by the Indian government, in a bind. While foreign investors are increasingly restricting support to companies involved in extracting or consuming coal, since it’s the most carbon-intensive fossil fuel, 70% of India’s electricity comes from coal plants. The bank has to balance its clean-energy lending policy with the power supply needs of the country, the SBI executives said.

The Carmichael mine is located in the Galilee Basin in the northeastern Queensland province. The mine’s license was officially approved by the Queensland government in 2019 and if fully developed, the mine could contribute to an eventual doubling of Australia’s coal exports. While that may provide a fresh boon for the country’s economy, it would be detrimental to efforts to limit global warming and follows a year when Australia suffered record temperatures and widespread wildfires.

SBI drafted an in-principle agreement with Adani in 2014 for a $1 billion facility and brought in several banks from across the world to provide the funding as part of a consortium. The plan has had several iterations since then as the project became more politically controversial. The memorandum of understanding between SBI and Adani for disbursing the loan included several covenants covering environmental clearance, viability of the project and timelines.

While environmental clearance was granted by the Queensland government, the disbursal is subject to meeting other conditions including funding visibility from other lenders, the two officials said.



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Deloitte, BFSI News, ET BFSI

Banking & Finance

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Data sharing, cybersecurity and data protection have emerged as the top concern areas for the banks as well as customers, according to Deloitte‘s report on open banking. “About 70 per cent survey respondents feel that greater emphasis should be made towards data protection by institutions,” said the report ‘Open banking: Unleashing the power of data and seizing new opportunities’.

Deloitte said the insights in the paper are supported by extensive research, past work, and credentials, complemented by a survey to understand customer needs with 400 plus respondents across age groups and population codes.

The report further said more than 80 per cent of respondents are uncomfortable in sharing the transaction history of accounts, hinting towards a need for all financial institutions (FIs) to assure customers that their data is secure.

Observing that not only banks, but even customers are wary of data sharing, it said, “Cybersecurity and data protection are the top concern areas across all age groups, followed closely by wariness towards third-party access to data and transparency on data usage”.

Over the years, the value of data has reached unprecedented levels.

Countries, globally, are empowering customers with access to institutions of their choice, while jurisdictions are witnessing various approaches to open banking strategy and implementation based on regulatory favourability and industry maturity.

FIs, it said, also have realised that they are now custodians and not owners of data and are trying to move to alternative revenue streams after receiving customer consent. Sandeep Sonpatki, Partner, Deloitte India said the onset of the pandemic has given a boost to welcome digital and API based banking in India with most salaried respondents already being highly comfortable with digital banking.

“However, 69.3 per cent of respondents in our survey felt that greater emphasis should be placed on data protection by the institutions, which makes it very crucial for banks embarking on a journey to develop API-enabled products and services, to have a well-defined roadmap to produce demand-driven solutions and to remain ahead of the curve while maintaining the principles of customer-centricity, security, and trust,” he said.

The report further said access to data can be leveraged by FIs for lead generation, cross-selling products, risk assessment, pre and post delinquency management, collections strategy, and product development; potentially leading to significant business augmentation, asset quality improvement, operational efficiency, and cost optimisation.

Open banking, the report said, is perceived quite differently across jurisdictions. Some have gone ahead to create a regulator-driven, well-defined framework such as the UK and Australia; while others have followed a more market-driven approach such as India.

The bottom line, however, is providing customers control over sharing their information and servicing them through a targeted, data-driven approach, it added. Open banking also offers scope to increase customer onboarding at remote locations through quick, paperless documentation, verification, and alternate credit risk assessments.

With the onset of COVID-19 and the focus towards digitisation, the report said it believes the next 12-24 months will see a significant shift towards open banking amongst Indian FIs. Companies will invest in building core capabilities to address customers’ immediate needs.



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