Australian banks oppose bitcoin exchanges

Australian businesses are turning away from bitcoin since Australian banks made the move last month to close 13 of the country's 17 bitcoin exchanges' accounts.
Australian businesses are turning away from bitcoin since Australian banks made the move last month to close 13 of the country's 17 bitcoin exchanges' accounts.

According to Reuters, Australian businesses are turning away from bitcoin since Australian banks made the move last month to close 13 of the country's 17 bitcoin exchanges' accounts. Australia was considered one of the most promising bitcoin markets, estimated to hold seven percent of bitcoin's £2.3 billion global value.

At least six Australian retail businesses said they were considering no longer using bitcoin. “If governments begin to aggressively attack the whole idea of cryptocurrencies and give it a bad name, it might have an adverse effect on our brand by accepting it,” said David Brim, co-founder of Tomcar Australia. They've sold one car using bitcoin after introducing the currency in November 2014.

Most mainstream banks in Europe and the US do not keep bitcoin accounts. This move by the Australian banks makes it difficult for people to convert regular currencies into or out of bitcoin. In August, a government inquiry recommended taking away sales tax for people who buy bitcoin, which presented discouragement to bitcoin supporters.

Tony Pearson, acting chief executive of the Australian Bankers' Association said the following on the rejection of bitcoin from Australia's “Big Four” banks: “Lack of transparency and regulatory oversight raises a number of risks for users and also poses risks for the payments system, the integrity of the financial system and the erosion of the tax base.”

Australia's organised crime agency voiced concern that bitcoin's undetectable nature makes it a prime target for money laundering and drug sales. In the UK and US, most large banks have cut ties with bitcoin account holders.

The remaining four Australian bitcoin exchanges have had their accounts frozen. They either must close their doors, move overseas or spread their business into smaller bank accounts to avoid being discovered.

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