CommBank confirms no crypto ban, but Australian banks are being cautious
The Big Four say there's no outright block, but you have to play by the rules.
With billions of dollars now in play, banks and traditional financial institutions around the world are starting to take notice of cryptocurrency and how traders are engaging with the markets. Despite global reports of outright bans, Australian banks have confirmed that they won't ban or block people from buying cryptocurrencies using funds from their bank accounts, but that such transactions will be carefully monitored.
Commonwealth Bank confirmed in a statement to finder that there was no outright restriction on buying into cryptocurrencies:
Our customers are able to buy and sell virtual currencies using Commonwealth Bank accounts, including credit cards, as long as they comply with our terms and conditions and all relevant legal obligations.
However, CommBank notes that some customers have seen cryptocurrency-related transactions fail. The bank says factors that might cause this include the currency exchange the customer is using being blocked by the bank's systems, the exchange's security systems rejecting the transaction or the payment method the customer is using no longer being accepted by the currency exchange.
Westpac, ANZ and NAB don't block the use of credit cards either, but these members of the Big Four are similarly cautious.
The National Australia Bank (NAB) has said: "ASIC [Australian Security and Investments Commission] advises that, as most of the virtual currency exchange 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."
In contrast, US banks are taking a different and far more conservative approach and banning the use of credit cards to buy cryptocurrencies.
A ban on the use of credit cards makes sense from the banks' perspective. US banks saw the impact of unsecured loans through the sub-prime crisis and the GFC (Global Financial Crisis) and are understandably cautious. A credit card is effectively an unsecured loan and a sudden fall in the value of a coin could see traders left with a substantial debt on their cards and a limited opportunity to pay it back. The US banks see that risk and aren't interested in taking it, at least for now.
With cryptocurrencies often used by people operating on the fringes of or outside of the law, both NAB and ANZ have said that they will monitor transactions closely, looking for "unusual behaviour" and any potential fraud.
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