Australia’s Bendigo Bank has become the latest bank in the country to block crypto payments. The bank recently announced that it was blocking “high-risk crypto payments” in a bid to protect customers from investment scams.
New Rule To Affect Fiat On-Ramp
Bendigo’s announcement comes after similar moves by other major banks in the country, including National Australia Bank, Westpac, and Commonwealth Bank. According to the bank, this move aims to combat fraudulent transactions, including ones made with crypto.
Although there aren’t specific details as to what transactions or exchanges will be affected, it will undoubtedly affect how crypto users in the country perform crypto transactions and hinder fiat on-ramping to these exchanges. This undoubtedly causes a setback to the growing adoption of cryptocurrencies in the country.
Debanking Is Not The Solution
The banks that have moved to block crypto payments have stated that the aim is to curb fraudulent transactions. However, there is enough reason to believe that this move isn’t necessarily the solution and may be counterproductive. The bad actors will just look for other means to carry out their illicit activities.
Meanwhile, the bank blocks will frustrate the operations of crypto exchanges in the country and further stiffen the growth of the crypto industry in Australia.
The Government has acknowledged this issue. In a statement released by the Department of Treasury earlier in June, it stated that the growing trend of banks cutting ties to crypto exchanges in the country could bring about several unwanted consequences like the crypto industry in the country becoming less transparent.
Speaking on debanking and its consequences, the statement read:
The Government recognizes the seriousness of de-banking and understands that inaction on the issue will stifle competition and innovation in the financial services sector and may drive businesses underground and to operate exclusively in cash.
While the authorities need to work on policy reforms to curtail these debanking trends, there is a greater need for them to work on creating a comprehensive regulatory framework for the crypto industry, one that will help regulated crypto exchanges in the country serve the growing crypto public better.
Australia is experiencing a greater demand for crypto in the country. A recent report revealed that almost 1 in 4 adults in Australia own crypto. Furthermore, the trading volume on exchanges in the country has increased rapidly, with a significant rise in the daily active users of crypto wallet apps.
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