Aussie Banks Shutting Out Bitcoin

Bitcoin exchanges Buyabitcoin and Bit Trader are among 17 others that have received letters from the likes of Westpac, Commonwealth Bank and other major banking players, informing them that they will be withdrawing their banking services, effectively crippling companies reliant on bitcoin in Australia.

Australian Digital Currency Commerce Association Chairman Ron Tucker told AFR that all large Aussie banks were shutting the door on bitcoin companies without explanation or negotiation.

“Our members have been unable to obtain any formal clarification on the reasons for closure, except for references to policy or risk,” Tucker, also the founder of Bit Trader, told AFR. “Just what policies or risks these are have not been specified.”

“The industry is more than happy to talk to the banks about their concerns. However, neither the association nor its members have been given the opportunity.”

Banking is one of the major sectors subject to disruption from the emergence of crypto-currencies, with new financial services popping up to support bitcoin and its ilk threatening to take the place of traditional banks. While current Australian Tax Office policy states that bitcoin is treated as a form of property, and therefore subject to high tax rates on trading, a Senate committee launched last year is expected to recommend that crypto-currency be treated as a form of currency, in line with shifting sentiments towards bitcoin overseas.

“It is widely recognised that the banking sector could stand to be disrupted,” Tucker told AFR. “Companies in this industry are in the business of offering and developing cost-effective financial services for consumers and businesses.”

The news follows developments that Commonwealth Bank has joined banks around the world in an effort to develop its own form of the ‘blockchain’ technology that powers bitcoin, in an effort to streamline the process of transferring funds between countries (AFR).

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