Banking News

Banks shut out Bitcoin

(22 September 2015 – Australia) Australian bitcoin companies have been advised by domestic banks that their accounts will be closed, according to The Australian Financial Review.

The publication says it has seen letters from Westpac Banking Corporation and Commonwealth Bank of Australia (CBA) indicating that the banks will close the exchanges’ accounts without further explanation.

Ron Tucker, chairman of The Australian Digital Currency Commerce Association, said all large Australian banks were shutting the door on bitcoin companies.

At least 17 Australian bitcoin companies have received letters and 13 already have had their accounts closed, including Bit Trade and Buyabitcoin have received the letters.

Tucker, also founder of Bit Trade, said "Our members have been unable to obtain any formal clarification on the reasons for closure, except for references to policy or risk. Just what policies or risks these are have not been specified,"

"The industry is more than happy to talk to the banks about their concerns. However, neither the association nor its members have been given the opportunity."

An Australian Senate committee last month said bitcoin and other cryptocurrencies were becoming part of the mainstream and should be recognised as a regular currency for goods and services tax purposes.

"It is widely recognised that the banking sector could stand to be disrupted, as indicated in comments from Westpac's CEO two weeks ago. Companies in this industry are in the business of offering and developing cost-effective financial services for consumers and businesses," Tucker said. "However, should bitcoin companies be shut out of the Australian marketplace because of de-banking actions, this question will forever remain a hypothetical."

Labor Senator Sam Dastyari, who chaired the Senate Economics References Committee into digital currency, told AFR "I am concerned that there is an allegation that Australian banks are deliberately choking small businesses, while setting themselves up to offer the same services,"

"We don't have a four-pillars policy to allow banks to guillotine emerging industries they are competing with … These small local digital currency companies are essentially competing to provide trading platforms, and develop emerging technologies."