Bendigo Bank in Australia has become the fourth major bank in the country to announce a ban on "high-risk cryptocurrency payments" to protect customers from investment scams. On July 31, the bank implemented new rules for instant payments to cryptocurrency exchange es, introducing some friction to real payments. The move aims to combat fraudulent payments and enhance protections for the bank's 2.3 million customers. Specific details on the types of transactions being blocked have not been disclosed.
The bank uses various factors to identify high-risk deals but has not revealed the specifics of its criteria. Bendigo Bank has not disclosed which cryptocurrency exchanges might be affected by its changes. The actions by Bendigo Bank follow similar moves by Australia's other major banks, including Commonwealth Bank, National Australia Bank (NAB), and Westpac, in recent months.
Industry experts, such as Chengyi Ong, head of policy at Chainalysis Asia Pacific, warn that such bank actions could lead Australia's crypto users to seek offshore exchanges. Blocking certain transactions may not prevent criminals from using others platforms. The uncertainty of bank access could also result in cryptocurrency exchanges and users operating outside the purview of authorities. Ong advocates for a collaborative approach involving banks, regulators, telecom providers, and social media platforms to address all potential attack vectors in the fraud lifecycle.
Dr. Aaron Lane, senior lecturer at RMIT's Center for Blockchain Innovation, suggests that banks should work constructively with exchanges to protect consumers. He emphasizes that debanking as a risk tool should target specific cases of serious and unacceptable risk rather than applying broad measures across industries or asset classes. Australia has been evaluating cryptocurrency-specific laws for over three years, and experts like Dr. Lane surge lawmakers to create balanced and effective regulations that support innovation and competition in the financial services industry. A warning from the Treasury Department in June echoed similar concerns, highlighting that inaction on debanking could push businesses to operate entirely in cash, stifling innovation and competition.
