Australian Banks Initiating Crypto Restrictions – What Are The Risks?

Australia has grown significantly in the crypto market over the past couple of years. From traders to casino players to everyday consumers, Australia’s nature towards early adoption and the nation’s tech-ready infrastructure have combined to make crypto a compelling option.

And for the past year’s events, the Australian government has decided to take a close review of crypto. In addition, there was a general expectation that some of the regulatory framework will be announced next year. However, Australian banks are launching restrictions of their own and within immediate effect. 

Commonwealth Bank of America (CBA), Australia’s largest and most influential bank has announced that it would block payments from client accounts to certain crypto exchanges. According to the bank’s spokesperson, there will be a 24-hour hold on transfers to crypto exchanges effective immediately, and a monthly cap of $10,000 Australian dollars ($6,816)  would be allotted “soon”. The said crypto exchanges haven’t been named yet and there’s no specific information on whether these measures applied to some or all exchanges.

Westpac on the other hand had already blocked several cryptocurrency exchanges in May stating that the action was part of a trial to reduce fraud losses from scams. Westpac did not also specify the names of these crypto exchanges but hours after the announcement, Binance Tweeted that they are unable to accept payments in Australian dollars due to “a decision made by our third-party payment provider”.

Meanwhile, Blockchain Australia has expressed its concerns about the potential ramifications of imposing these regulations on the industry. In response to the CBA’s decision, Blockchain Australia has warned the community about the possible adverse effects that such blanket restrictions could have.

As the debate surrounding the crypto industry in Australia intensifies, the implications of imposing restrictions on this innovative technology will prompt a critical examination of the future of finance and the role of regulation in the country.