Blockchain Australia has responded to recently imposed banking limits on crypto payments, aiming to tackle the issue “head-on by using real data.” The move comes after Australia’s Commonwealth Bank (CBA) applied partial restrictions to bank payments to crypto exchanges, citing “scams and the amount of money lost by customers.” 

CBA Unveils Restrictions to Payments to Crypto Firms

Last week, CBA announced that it aims to decline “certain payments” to crypto exchanges or hold them for 24 hours to protect customers from scams. The bank also said it plans to introduce a limit of payments to crypto exchanges of 10,000 Australian dollars ($6,700) per calendar month in the months ahead.

“With the incidences of scams increasing and, in many cases, customers suffering significant losses from being scammed, the introduction of 24-hour holds, declines, and limits on outbound payments to cryptocurrency exchanges will help reduce both the number of scams and the amount of money lost by customers,” James Roberts, Commonwealth’s general manager of fraud management, said in the announcement.

Roberts added that customers making payments to crypto exchanges face a “significantly higher risk” of being scammed. The new measures came as CBA prepares to roll out its new NameCheck anti-fraud technology to external organizations, which will process payments in Australia to help combat scams and frauds. 

Blockchain Australia Launches New Initiatives to Tackle Crypto Scams Issue

In response to increasing restrictions on crypto payments, Blockchain Australia, an industry body representing the Blockchain and digital currency industry in Australia, has launched new initiatives to tackle the issue of crypto scams and frauds. Under the new plan, the body will take numerous measures.

For one, Blockchain Australia has started an education program to educate consumers on crypto and its benefits, including ways to identify scams. It also aims to recognize good actors in the industry that employ best practices recommended by banks. 

Furthermore, the organization is conducting an “Industry Roundtable” on June 27, 2023. It aims to use this roundtable to facilitate collaboration between the blockchain industry, the banking and finance industry, and the government to reduce scams in Australia.

Blockchain Australia has invited the Hon. Stephen Jones MP, Assistant Treasurer and Minister for Financial Services, the Australian Securities and Investment Commission, the Australian Competition and Consumer Commission, the Australian Bankers’ Association, the major banks, and other concerned parties to join the roundtable.

“The recent decision by banking institutions to restrict millions of their customers from making payments to cryptocurrency exchanges represents a profound curtailment of economic freedom in Australia,” Jackson Zeng, CEO of Caleb and Brown, said in a statement. 

“Every individual has the inherent right to the economic freedom to make decisions on how and where to use their finances or allocate their investments. The principal role of banks is to facilitate these decisions, not to impose restrictions upon them.”

Lisa Wade, Blockchain Australia CEO, and Deputy Chair, praised the future potentials of the blockchain and Web3 and stressed the importance of Australia being a part of its development. She urged the industry and the government to work together to combat scams and fraud, which is critical to overcoming financial exclusion.

Blockchain Australia said blanket restrictions have “very costly” 

side effects. Getting “banks to provide opt-in protection and education to users, or provide targeted approaches to specific categories of at-risk customers with appropriate education and notification,” may be a “more effective” solution to reducing crypto-related scams.

Crypto Under Scrutiny in Australia

Crypto has been under increasing scrutiny in Australia. Last month, cryptocurrency exchange Binance Australia told customers they would lose access to Australian dollar deposits and withdrawals due to a decision by its third-party service provider. 

While the platform did not disclose the third-party service provider, reports claimed that Westpac, one of the biggest Australian banks, was the platform. In a separate announcement, Westpac also revealed that it had banned customers from transferring funds to several crypto exchanges. 

Moreover, in March, Australia’s prudential regulator instructed banks to report their exposures to crypto firms and startups following the collapse of the Silicon Valley Bank and the resulting turmoil in the banking sector. The APRA asked local banks to improve their reports on crypto assets and provide daily updates to the regulator to gain more insight into potential vulnerabilities in the system.

Do you think the upcoming industry roundtable in Australia could help improve regulatory conditions? Let us know in the comments below. 

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