Bendigo Bank becomes the fourth major financial institution in Australia to restrict crypto-related transactions.
Bendigo Bank, one of Australia's biggest financial institutions, has announced that it will impose restrictions on certain types of payments to cryptocurrency exchanges that it perceives as risky.
Jason Gordon, the bank's head of fraud, confirmed on the last day of July that they've established new rules for instant transactions to crypto exchanges that may somewhat affect legitimate payments.
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The bank's primary motivation for this move is the protection of its customers from investment scams and fraudulent transactions.
According to a spokesperson for Bendigo Bank, the institution will specifically target and block high-risk transactions. However, details about the methods they use for identifying such transactions or which crypto exchanges will be impacted by this policy have not been disclosed.
This move by Bendigo Bank comes on the heels of similar actions taken by three of the largest banks in Australia, namely, the Commonwealth Bank, National Australia Bank, and Westpac.
However, Chengyi Ong, Chainalysis APAC Policy Head, voiced his concerns about these blocks. Ong warned that these actions could push the public dealing with crypto in Australia towards offshore exchanges. He pointed out that this wouldn't necessarily prevent criminal elements from using other platforms. In fact, it could force crypto exchanges and users to move beyond the authority's jurisdiction due to uncertainty over banking access.
Dr. Aaron Lane, a senior lecturer with the RMIT Blockchain Innovation Hub, suggested that banks should work collaboratively with crypto exchanges rather than cutting them off.
Debanking as a risk tool should be reserved for individual cases of serious and unacceptable risk, not a general posture towards an entire industry or asset class.
These concerns echo an official statement made by the Department of the Treasury in June, which cautioned that inaction on debanking could stifle innovation and competition in financial services and push businesses to operate exclusively with cash.
