Bendigo Bank in Australia blocks high-risk payments to crypto exchanges.

Bendigo Bank in Australia blocks high-risk payments to crypto exchanges.

The Rise of Blockchain Technology in Australia’s Banking Industry

Bendigo Bank’s warning about investment scams

Australia’s blockchain industry is facing a new challenge as Bendigo Bank becomes the fourth major bank in the country to block “high-risk crypto payments.” Bendigo Bank’s decision, motivated by the need to protect customers from investment scams, reflects the growing concerns surrounding fraudulent payments within the industry.

According to Jason Gordon, the head of fraud at Bendigo Bank, the implementation of new rules on instant payments to crypto exchanges has added “some friction to certain genuine payments.” The bank’s objective is to combat fraudulent payments and enhance customer protections for its 2.3 million customers. Although specific details about the blocked transactions are not disclosed, high-risk transactions will be identified using a combination of risk factors.

This move by Bendigo Bank follows similar actions taken by three of Australia’s Big Four banks – Commonwealth Bank, National Australia Bank (NAB), and Westpac. While the intention of these actions may be to safeguard customers, experts warn that such measures may force Australia’s crypto public to interact with offshore exchanges, potentially leading to a loss of jurisdiction over authorities.

Chengyi Ong, APAC Policy Head at Chainalysis, emphasizes the importance of cooperation between various stakeholders such as banks, regulators, telecommunication providers, and social media platforms to combat investment scams effectively. Ong suggests that targeting every potential touchpoint between scam victims and scammers is crucial. Cutting off exchanges entirely might not be the best solution as it could drive exchange users underground or towards other platforms, regardless of whether they are crypto-related or not.

Dr. Aaron Lane, Senior Lecturer with the RMIT Blockchain Innovation Hub, believes that banks should constructively work with exchanges to enhance consumer protection. He argues that debanking, the practice of restricting access to banking services, should only be reserved for individual cases of serious and unacceptable risk, rather than a general approach towards the entire industry or asset class.

Australia has been grappling with the need for crypto-specific laws for over three years. Dr. Lane urges lawmakers to take crypto law reform “out of the too-hard basket” and proactively address the regulatory challenges associated with the industry. In June, the Department of the Treasury issued an official statement acknowledging the potential negative consequences of inaction on debanking, including stifling financial services competition and innovation, as well as driving businesses to operate exclusively in cash.

It is evident that the growing interest in blockchain technology and cryptocurrencies has led to increased scrutiny and the implementation of risk-based controls within Australia’s banking sector. While the objective of protecting customers from investment scams is legitimate, it is crucial for industry stakeholders to find a balanced approach that maximizes consumer protection while fostering innovation and competition within the cryptocurrency space.


Key Takeaways
📌 Bendigo Bank becomes the fourth major Australian bank to block “high-risk crypto payments” to combat investment scams and protect customers.
📌 Similar actions have been taken by other major banks, including Commonwealth Bank, NAB, and Westpac.
📌 Cooperation between banks, regulators, telecommunication providers, and social media platforms is crucial to effectively combat investment scams.
📌 Banks should work constructively with exchanges to enhance consumer protection instead of implementing strict debanking measures.
📌 Australia’s lawmakers need to actively address the crypto law reform to prevent stifling innovation and driving businesses underground.

We will continue to update Phone&Auto; if you have any questions or suggestions, please contact us!

Share:

Was this article helpful?

93 out of 132 found this helpful

Discover more

Bitcoin

Bitcoin Turns 11: A Tale of Halvings and Highs

Fashionista, mark your calendars! The cryptocurrency community is gearing up to celebrate the first anniversary of th...

Bitcoin

MicroStrategy Co-Founder Sells $216 Million in Shares for Bitcoin Investment

Michael Saylor, co-founder of MicroStrategy, makes strategic move to invest $216 million in Bitcoin through personal ...

Market

Price analysis for SPX, DXY, BTC, ETH, XRP, BNB, ADA, DOGE, SOL, MATIC on 7/24.

Bitcoin's break below the current range presents an opportunity for potential growth and a chance to explore new poss...

Bitcoin

November Mining News from Wu Mining Pool Review Transaction Sparks Huge Controversy, Multiple Decentralized Mining Pools Launched

Author | Wu, a blockchain and Bitcoin developer, wrote a post stating that according to the miningpool-observe servic...

Bitcoin

Portal Raises $34 Million to Develop Decentralized Bitcoin Cross-Chain Swaps

Portal, a leading fintech provider, has successfully secured $34 million in seed funding to further enhance its revol...

Bitcoin

Japanese Investors Preferring XRP over Bitcoin: The Great Exodus

A recent study has unveiled the growing popularity of Ripple's XRP among Japanese investors, who are opting to invest...