Australian Banks Receptive to Cryptocurrencies
2 of Australia’s leading ‘Big 4’ banks: ANZ and Westpac, have allowed customers to purchase cryptocurrencies using their bank accounts. This is despite rumours of Australian banks targeting a ban on cryptocurrency purchases last year, headlined by a post last December alleging blocked client accounts and transfers to major cryptocurrency exchanges, including CoinJar, Coinbase and BTC Markets.
State of Cryptocurrencies in Australia
ABC News has reported that ANZ and Westpac have expressed their commitment to not ban customers from buying cryptocurrencies using their bank accounts. However, this does not mean ANZ and Westpac will have no interest with regards to these types of transactions, as they expressed a continued commitment to protecting customers against potential fraud and other scams.
As explained by an ANZ spokesperson:
‘(ANZ) does not provide support or banking services to unregulated businesses like cryptocurrency exchanges or issuers’.
Westpac has taken a similar stance with clients. Thus, despite allowing customers to purchase cryptocurrencies using credit cards, it is unclear whether this would be accompanied by further prohibitive policies.
Other banks including the NAB and Commonwealth Bank have taken stricter regulatory measures. As cited by the NAB, the Australian Securities and Investments Commission (ASIC) warns most virtual currency platforms are not regulated and customers are prone to possible fraud or scams.
“To reduce the risk for our customers, and to help protect their money, some card transactions may not be processed,”
commented NAB.
“We take the protection of our customers’ information and accounts extremely seriously.”
Moving forward
The move by Australian banks to allow cryptocurrency payments differs from the cautious approach taken by U.S. banks J.P. Morgan, Bank of America and Citi, as well as U.K-based Lloyds Banking Group. Those banks have recently announced bans on their customers’ credit cards for purchasing digital currencies.
“Across Lloyds Bank, Bank of Scotland, Halifax and MBNA [the brands under its corporate umbrella], we do not accept credit card transactions involving the purchase of cryptocurrencies,”
a Lloyds spokeswoman said in an email.
A major concern for banks, as explained by Lloyds, is when customers buy bitcoin to make profits but face significant debts when cryptocurrencies fall. Should the cryptocurrency market continue to crash, banks may ultimately bear the liability for any unpaid debts.
Given the surging popularity of crypto trading, it will be interesting to see if banks can successfully navigate through the pitfalls and embrace cryptocurrency purchases to attract further clients.
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