Australia’s biggest banks confirmed that there are no plans to ban buying Bitcoin with credit cards. Popular Australian banks JP Morgan, Bank of America and Citigroup have adopted a different approach that their US counterparts.
No ban, but monitoring of transactions
ANZ (Australia and New Zealand Banking Group) told ABC news that it “does not prohibit customers buying digital or cryptocurrencies, or accepting them as a form of payment.” However, the bank does monitor transactions for “unusual behavior” in accordance with AML responsibilities. The bank also does not interact with companies “that operate as issuers, dealers or exchanges of digital cryptocurrency.”
National Bank of Australia suggested that it would stop cryptocurrency transactions should problems arise. NBA spokesperson elaborated:
“ASIC advises that, as most of the virtual currency exchange platforms are generally not regulated, customers may not be protected or have any legal recourse if the platform fails or is hacked. We take the protection of our customers’ information and accounts extremely seriously to reduce the risk for our customers, and to help protect their money, some card transactions may not be processed.”
Ban on purchasing Bitcoin with credit cards
A ban on Bitcoin purchases from credit cards from US banks was met with anger by the community. It is, however, common practise to prohibit purchasing stocks, bonds and other securities with credit cards. Using borrowed funds to purchase these types of assets creates a lot of unnecessary risk for the bank and opens the gate for manipulators and scammers. Cryptocurrency is currently a very speculative asset and not even properly regulated, so it makes sense that some banks simply prefer to sit this out for the time being.
Banks have a very interesting role to play in the decentralization of the monetary system that is currently taking place. On the one hand, the new system is ideologically bound to make banks or any kind of middleman obsolete. On the other hand, at this time the cryptocurrency market needs banks in order to fuel the evergrowing demand to buy cryptocurrencies for fiat. Banks need the technology behind cryptocurrencies – blockchain, in order to stay competitive in the developing financial landscape. Moreover, banks need cryptocurrencies as well, but not fully decentralized ones (like Bitcoin and Ethereum), just those that they can control and integrate into their services (like Ripple). This love and hate relationship will not go away any time soon, as right now both sides need each other.