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Response to Banking Limits on Crypto Payments

Media Statement

14 June 2023

As Australia’s peak industry body representing the Blockchain and digital currency industry, Blockchain Australia recognises the challenges presented by crypto-related scams and fraud.

We have launched the following initiatives:-

  1. Starting an education program for consumers on crypto and it’s benefits including how to identify scams: crypto isn’t bad, scammers are bad;
  2. Recognising good actors in our space who uphold best practices and seek acknowledgement of those practices by the banks; and
  3. Conducting an Industry Roundtable on 27 June 2023 to drive collaboration between the blockchain industry, the banking and finance industry and Government to reduce scams in Australia.

We believe these steps will help protect all Australians from scams.

A robust response to hold bad actors accountable and to educate consumers in detecting and avoiding scams are the most effective response to combat scams and fraud. Blockchain Australia applauds Australian digital currency exchanges and Blockchain Australia members who have implemented robust frameworks to tackle scams and frauds.

Blockchain Australia publishes guidance to help consumers identify scams at the following link https://blockchainaustralia.org/scamalerts/

The growing Australian industry and digital currency exchanges have been working hard to reduce scams and fraud while also operating under a constant fear of “de-banking”.  Actions overseas, including around banking of digital asset businesses in the US, create further concerns and Australia is fortunate to have consultation on regulatory reform underway.

Lisa Wade DigitalX CEO and Deputy Chair of Blockchain Australia commented: “Blockchain and Web3 are the financial rails of the future and it is really important Australia is part of this build. Let’s rally against scams and work together to move past this financial exclusion so we can take our seat at the global table and rally for financial inclusion for all” 

Today, we are taking a further step, and organising a roundtable discussion for 27 June 2023, during Blockchain Week, with the aim of unifying all stakeholders and tackling this issue head-on by using real data.  We will invite The Hon Stephen Jones MP,  Assistant Treasurer and Minister for Financial Services, the Australian Securities and Investment Commission, the Australian Competition and Consumer Commission, the Australian Bankers’ Association, the major banks, and other interested parties to engage in this crucial dialogue.  We want to cultivate a shared sense of urgency and collaboration to protect those at risk of scams without losing the benefits of a growing digital currency  industry.

Jackson Zeng, CEO of Caleb and Brown added “The recent decision by banking institutions to restrict millions of their customers from making payments to cryptocurrency exchanges represents a profound curtailment of economic freedom in Australia. Every individual has the inherent right to the economic freedom to make decisions on how and where to use their finances or allocate their investments. The principal role of banks is to facilitate these decisions, not to impose restrictions upon them.”

It’s crucial to remember that all digital currency exchanges operating in Australia are registered with AUSTRAC, the national Anti-Money Laundering (AML) regulator. The Australian digital currency industry has been diligent in its pursuit of tailored, fit-for-purpose regulation, which can assist the public in discerning those operations that adhere to the highest standards and best practices. The enforcement of these standards should remain the domain of our regulators”.

Michael Bacina, Chair of Blockchain Australia said “Banking is an essential service to nearly every Australian business in our increasingly digitised economy, and there is an outsized impact on all customers of a business when payment restrictions or debanking takes place.  In many cases it can be fatal for the business.”

Blockchain Australia considers that blanket restrictions have very costly side effects, not only limiting consumer’s use of their own money, but also shifting the behaviour of those at risk of scams or fraud into another type of scam or fraud which may be harder to detect.  In our view, it may be more effective for banks to provide opt-in protection and education to users, or provide targeted approaches to specific categories of at-risk customers with appropriate education and notification, to reduce scams, while minimising the collateral impacts which arise from a broader-brush approach.

All Blockchain Australia members are encouraged to reach out to Director Jackson Zeng to contribute to this ongoing effort to keep Australian’s safe and keep Australian’s benefiting from this exciting technology.