Major Australian Banks Will Not Ban Cryptocurrency Related Transactions

Major banks in Australia have confirmed that they will not prevent their customers from buying and selling Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term using credit cards, unlike their counterparts in the United States and the United Kingdom.

Australia and New Zealand Banking Group (ANZ) told ABC News that it “does not prohibit customers buying digital or cryptocurrencies, or accepting them as a form of payment.”

To protect its customers against various fraudulent activities, and also to prevent illicit activities, ANZ's spokesperson revealed that the bank monitors all cryptocurrency-related transactions.

However, the spokesperson from ANZ made it clear that the bank does not engage in business dealings with cryptocurrency exchanges or any other cryptocurrency businesses as they are still unregulated entities and it is against the bank’s policy. The spokesperson said: “We do not bank [with] businesses that operate as issuers, dealers or exchanges of digital or cryptocurrency.”

Meanwhile, National Australia Bank said that the bank might block certain transactions if security concerns arise.

The spokesperson of National Australia Bank told ABC News: “ASIC advises that, as most of the virtual currency Exchange Exchange An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv An exchange is known as a marketplace that supports the trading of derivatives, commodities, securities, and other financial instruments.Generally, an exchange is accessible through a digital platform or sometimes at a tangible address where investors organize to perform trading. Among the chief responsibilities of an exchange would be to uphold honest and fair-trading practices. These are instrumental in making sure that the distribution of supported security rates on that exchange are effectiv Read this Term platforms are generally not regulated, customers may not be protected or have any legal recourse if the platform fails or is hacked.”

“We take the protection of our customers' information and accounts extremely seriously. To reduce the risk for our customers, and to help protect their money, some card transactions may not be processed,” the spokesperson added.

Meanwhile, Westpac's spokesperson simply confirmed the news saying: “We currently have no restrictions on credit card use to purchase cryptocurrency.”

Restrictions by US and UK banks

Unlike Australian banks, banks in the US and the UK see transactions related to cryptocurrencies in a very different way.

Three major banking institutions on Wall Street - JP Morgan Chase, Bank of America, and Citigroup - banned all cryptocurrency-related transactions on their credit cards. Citigroup, however, confirmed that it will review its policy in this regard.

Following the US banks, Lloyds Bank in the UK banned all credit card transactions related to cryptocurrencies and also updated its previous policies. Lloyds’ spokesperson said: “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA [the brands under its corporate umbrella], we do not accept credit card transactions involving the purchase of cryptocurrencies.”

However, the ban does not apply to transactions made with debit cards.

Customers often purchase cryptocurrencies in the hope of gaining profit in a short period. This puts the bank in a risky position, as these investors face could face significant debt when cryptocurrencies fail.