Bitcoin is in an awkward state in Australia. In the beginning, the country seemed to be quite open-minded to the idea of virtual currencies, and let things slide without any intervention. Later on, it was decided that Bitcoin would not only be taxable, but subject to additional taxation on top of the normal rate to boot. If that wasn’t enough, major Australian banks are no longer working with Bitcoin companies either.
Australia & Bitcoin – Not A Happy Marriage
Bitcoin and the Australian financial sector will never be besties, that much is certain. Several parties have been fighting the idea of virtual currencies from the beginning, and still continue to do so today. Despite Bitcoin offering a ton of technological innovation, Australia does not want to be part of it, by the look of things.
This comes as quite a surprise, what with the country recently announcing the taxation plans for Bitcoin and other virtual currencies. While this decision has made various companies pack their bags and move overseas, larger Bitcoin businesses have stayed behind. It even seemed as if the traditional financial sector was showing a sudden interest in Bitcoin and blockchain technology.
Blockchain technology can play an important role in the remittance market, an area most banks are struggling with due to compliance risks. Westpac Banking Corp recently pulled out of this market, just a few months ago, because of this specific reason. Underbanked and unbanked nations are left in the cold by financial conglomerates, simply because there are not enough profits to be made.
“The current bitcoin operating model requires very tough compliance and assurance requirements to ensure we meet the high standards required under anti-money laundering regulations. We continue to monitor developments in bitcoin, including their regulation.” – A Westpac spokesperson told Australian media a few months ago.
Banks Closing Bitcoin Businesses’ Accounts
According to details provided to us by the Australian Digital Currency Commerce Association [ADCCA], 17 Bitcoin businesses have been notified regarding their bank accounts being closed shortly. Among these 17 companies are BuyaBitcoin and BitTrade, two Bitcoin exchange platforms active in Australia.
It goes without saying that neither the affected companies nor the ADCCA, are pleased with this decision. No one was notified in advance of this pending decision, and everything just sort of happened behind the scenes. Once again, the traditional financial sector refuses an open dialogue with their customers.
One month ago, the Australian government announced how they wanted to regulate Bitcoin more tightly, but also treat the virtual currency as money. As a result, proper taxation guidelines should be implemented, making it easy enough to understand for everyday consumers dealing in Bitcoin and other virtual currencies.
Westpac, one of the four major Australian banks, invested in overseas Bitcoin exchange platform and wallet provider Coinbase. This marked the first Bitcoin investment by any Australian bank in history and was seen as a “vote of confidence” by industry experts. But it looks like that was only a ruse, as the banks are back to being their old daft selves once again.
“We continue to speak with banks to find a solution to the problem. ADCCA looks forward to guidance from the government as to how the situation can be resolved.” – The ADCCA concluded.
Source: The Fiscal Times
Images courtesy of Westpac, Shutterstock