Over the past year, we have seen multiple banks and financial entities block or freeze customer accounts that were tied to cryptocurrency exchanges. These banks see digital currencies as threats and therefore attempt to deter customers from investing in them.
It is now Australia’s turn to make the headlines, as four major Australian banks have been reported to freeze accounts of customers that had any interaction with digital currency exchanges. The ANZ, the Commonwealth Bank of Australia, the National Australia Bank, and the Westpac Banking Corporation are being cited. In addition to freezing accounts, it has been said that these banks cancel and block money transfers to exchanges, including Coinbase, therefore preventing their customers to purchase or trade cryptocurrencies. This information has been reported by multiple customers.
The four banks responded but their answers were not very satisfying to investors. The Commonwealth Bank of Australia claimed that they are able, according to their policies, to deny any sort of cryptocurrency related transactions. The bank also stated that they feel that cryptocurrencies are not regulated enough and are unreliable. ANZ responded by saying that they have the right, according to their own rules, to close accounts if they do not meet satisfactory conduct. These decisions are made at their own discretion.
Why are Banks Against Cryptocurrencies?
There are multiple reasons why many banks around the world are against cryptocurrencies. The original purpose of cryptocurrencies, which was stated by Satoshi Nakamoto in the bitcoin whitepaper released in October 2008, was to create a peer-to-peer network, completely decentralized and detached from banks, organizations, and governments. Most investors in bitcoin and other digital currencies feel the need and desire to completely emancipate themselves from those powerful entities, and want to have total control of their finances and personal assets. This is the opposite of what banks want and therefore, they attempt to prevent money flowing into these exchanges, and want to considerably decrease the rate of public adoption.
Banks are also worried about security issues as these cryptocurrencies are still unregulated. Financial organizations fear the risks of speculation, losses and illegal activities. Moreover, many cryptocurrencies have a common goal, anonymity, which banks tend to dislike.
As mentioned in our previous article, we can be sure to see more regulations and laws introduced to monitor cryptocurrencies in 2018.
TLDR: Four Australian banks are under fire after customers have reported frozen accounts. These banks are against cryptocurrencies for multiple reasons and are trying to prevent their customers from investing. It is also reported that these organizations have blocked transfers to major cryptocurrency exchanges. We can expect more regulations in 2018 for the world of cryptocurrencies.