Australia’s largest banks have ended all financial support and abruptly closed down the bank accounts of at least 17 Australian Bitcoin companies, including the Australian Digital Currency Commerce Association Chairman Ron Tucker’s Australian bitcoin exchange Bit Trade.
“The banks had not advised any of our members. To the best of our knowledge all, or nearly all digital currency businesses have received letters from their bank, or in many cases banks, advising of the closure of their accounts. This includes at least 17, with 13 of these closed permanently,” Tucker told Bitcoin Magazine.
Major Australian banks, including Westpac Banking Corporation and Commonwealth Bank of Australia, have not announced their motivations behind the termination of banking support for bitcoin companies. This incident has attracted the attention of the Australian Competition and Consumer Commission (ACCC) and Senator Matthew Canavan, who sees the sudden pronouncement of the bank as an unlawful act, and has requested the ACCC to launch a full investigation on the banks.
“Whilst we’re unable to comment on the banks’ motivations (that is for them to explain) however, the consequences of these moves are becoming more clear. The Australian Bitcoin industry, as part of a larger revolution in financial technology, has seen its growth severely curtailed by this unexplained wave of debanking,” Tucker added.
Startups Begin to Leave Australia
“Unfortunately most digital currency startups have already shut their doors in Australia as no alternative banking solutions were available. In at least one case, one Bitcoin company, Coinjar, did relocate its head office to a more welcoming market in the U.K.,” Tucker told Bitcoin Magazine.
Most Australian Bitcoin startups offer bitcoin exchange services and merchant bitcoin payment processing; two of the few bitcoin-related services which require banking or credit card support. Although some bitcoin startups have begun to search for alternative financial institutions and organizations to maintain their operations, most companies have failed to secure banking service partnerships.
“Presently the industry here in Australia have no alternative options despite best efforts of our members to reach out to various banking sector participants,” added Tucker.
No Clear Justification
Labor Senator and a member of the Senate Economics References Committee Sam Dastyari showed his concerns toward the banks, due to their lack of explanation and justification behind the abrupt termination of banking support.
“I am concerned that there is an allegation that Australian banks are deliberately choking small businesses, while setting themselves up to offer the same services. We don’t have a four-pillars policy to allow banks to guillotine emerging industries they are competing with … These small local digital currency companies are essentially competing to provide trading platforms, and develop emerging technologies,” explained Dastyari .
The Australian Digital Currency Commerce Association strongly believes that the banks owe an explanation and a clear justification behind the “debanking” of the companies. Currently, all Australian major banks have terminated banking support for Bitcoin companies.
“Our members have said the banks have been remarkably unwilling to provide explanations for ceasing to provide services for ADCCA members. Our members, some of whom may end up being partners with or competitors to the banks in the future, are currently at the mercy of established financial institutions. At the very least I think our members are owed an honest explanation of why they are being debanked,” Tucker said.