CBA buys stake in US crypto platform Gemini

Banking giant CBA has taken another step into the riskier world of cryptocurrencies, buying a stake in US trading platform Gemini.

CBA CEO Matt Comyn said the bank’s investment in Gemini was tied to an exclusive partnership for Australia and New Zealand. Picture: Adam Yip

Commonwealth Bank is taking another bet in the crypto currency industry by buying a minority stake in one of the world’s largest regulated crypto exchanges and custodians, via a raising that valued Gemini at $US7bn ($9.6bn).

The bank participated in a $US400 million equity raising by Gemini – its first outside capital round – which was led by technology investment firm Morgan Creek Digital. Along with CBA, the raising’s other participants also included growth equity fund 10T, alternative investment firm ParaFi and Marcy Venture Partners.

Gemini was founded in 2014 by US Olympian rowers and twins Tyler and Cameron Winklevoss. The duo are also known for settling a dispute with Facebook’s Mark Zuckerberg for $US65m in stock and cash, over the origins of the idea for the social networking site.

CBA did not disclose the size of its stake in Gemini, but labelled the holding a “small minority investment”.

“Our investment in Gemini is part of an exclusive partnership in Australia and New Zealand. We congratulate Gemini on the completion of their capital raise, and look forward to working closely with them,” CBA chief executive Matt Comyn said in a statement on Friday.

“In looking at ways that we can support our customers, we have made the strategic decision to partner with Gemini, a global leader with strong security and a track record of serving large institutions.”

Cameron Winklevoss said: “In 2021 we diversified our revenue stream, expanded to new territories, acquired pioneering companies, and invested in industry-redefining innovations through the Gemini Frontier Fund. We also supported Bitcoin core development through the Gemini Opportunity Fund.”

But the CBA investment comes after the Reserve Bank’s head of payments policy, Tony Richards, on Thursday urged caution about cryptocurrencies, particularly given the global hype and some misinformation around local participation.

He also warned of scenarios that could “significantly challenge the current fervour of cryptocurrencies”.

Mr Richards said while cryptocurrencies had captured a lot of attention it was “unclear how widely held they are”.

Statistics claiming that around that around 20 per cent of the Australian population hold cryptocurrencies were “somewhat implausible”, he added.

Earlier this month, CBA became the nation’s first major retail bank to offer customers the ability to buy, sell and hold bitcoin and other cryptocurrencies directly through the CommBank app.

CBA partnered with Gemini and blockchain analysis firm Chainalysis.

Mr Comyn has said about 8 per cent of the Australian population currently invested in crypto – a figure which had grown rapidly over the last 12 months.

Gemini is pushing into new markets around the world after entering the UK this year. It also filed its licence with the Monetary Authority of Singapore to push further into the Asia Pacific.