blog In today’s day and age, you wouldn’t imagine that Australia’s banks would have much of a problem selling bank accounts to … pretty much anyone. If you have money to deposit or transactions to process, you would probably expect to be treated as a customer just like any other. But that expectation, it seems, doesn’t apply to Australia’s growing cadre of Bitcoin trading companies, who have discovered that the mere nature of their business has been enough to get them blacklisted. The Financial Review reports (we recommend you click here for the full article):
“Australia’s biggest banks are threatening to hobble the hopes of emerging local bitcoin companies, by suddenly withdrawing banking services from their potential future rivals.”
Of course we’ve been seeing this kind of behaviour for some time — the banks’ behaviour is not new, although the scale appears to be.
My opinion is that there are probably two things going on here.
Firstly, given the huge interest which Australia’s banks have in the currently exploding financial technology (#fintech) space and the face that some of the banks themselves are already directly investing in Bitcoin-like blockchain technology for future applications, it’s not hard to guess part of what’s happening: Giant quasi-monopolies trying to squash their future competition.
Bitcoin trading companies may represent the Wild West of Australia’s financial services sector — but it’s a Wild West that may eventually come to rival the operations of Australia’s banks themselves. Better, some may feel within Australia’s major banks, to nip this growing sector in the bud before it gets too large.
Of course, I suspect that there is also another side to this story. Most likely Australia’s major banks are also quite wary of the extreme volatility of Australia’s digital currency sector, and worried about any regulatory or customer implications if they get too close to these new players and things go South. The Wild West was a chaotic place … enough to make any seasoned banker extremely nervous.
Image credit: antanacoins, Creative Commons
It’s interesting that whilst Real Estate Agents, Lawyers & Accountants are exempt from KYC & AML requirements (see http://www.smh.com.au/business/comment-and-analysis/money-laundering-burden-yet-to-hit-property-market-20150510-ggy8c5.html), banks are using this as an excuse to shut down Australian Bitcoin operations.
I once used BTC Markets (https://btcmarkets.net/), and their onboarding process included online validation of identity which is better than bank accounts I’ve opened. They still seem to be around, and from the looks of it going pretty well with ~150k in BTC traded yesterday. From the news section they seem to have moved bank from Westpac to CBA & Bendigo because of fee issues, so perhaps it depends on how much of a legitimate business the BTC company is?
I spoke too soon, CBA has cancelled their account and they’ve moved to BOQ.
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