Over the past couple of years, Australia has emerged as an increasingly significant player in the global crypto market. From traders to casino players to everyday consumers, Australia’s natural tendency towards early adoption and the nation’s tech-ready infrastructure have combined to make crypto a compelling option.
Events over the past 12 months have prompted the Australian government to undertake a close review of crypto, and there was general expectation that some form of regulatory framework would be announced in 2024. It has come as a surprise, therefore that Australian banks are launching restrictions of their own, and with immediate effect.
What you'll learn 👉
CBA initiating anti-fraud measures
According to Reuters, Commonwealth Bank of America (CBA), the nation’s largest and most influential bank, announced on June 8th that it would be blocking payments from client accounts to certain, as yet unnamed, cryptocurrency exchanges. The bank’s spokesperson said it would be placing a 24 hour hold on transfers to crypto exchanges with immediate effect and that a monthly cap of AU$10,000 would be introduced “soon.”
The spokesperson did not specify whether these measures applied to some or all exchanges and declined to be drawn on the question. James Roberts, the General Manager of Group Fraud Management for CBA, issued a press statement to accompany the announcement, in which he said customers making payments to crypto exchanges face a “significantly higher risk of potentially being scammed.”
CBA’s decision mirrors a similar move by Westpac, another of Australia’s big four banks, last month. On May 18, the bank announced it was blocking “a number of cryptocurrency exchanges” and that the action was “part of a trial” aimed at reducing fraud losses from scams. Like CBA, Westpac did not name names, however, within hours of the announcement, Binance Tweeted that it was unable to accept payments in Australian dollars due to “a decision made by our third party payment provider.”
Australian casino gamers on high alert
The news has sent shockwaves through Australia’s significant crypto community, and Binance Australia is seeing Bitcoin trading 20 percent lower than other platforms as investors become divestors. Another significant subset of Australia’s crypto community remains in a watch and wait posture, however. This is the thousands of Australians who gamble with crypto, not on the exchanges, but using their real money app of choice at mobile casinos. Australians have a long-standing passion for pokies and other casino games, and since 2020, they have increasingly indulged this passion online.
The Australian regulatory framework surrounding online casinos is a story in itself and one we will not dive into here. Suffice it to say that much like those in the USA, many Australian online casino players find that using crypto is the most convenient way to conduct business with mobile casino sites. That remains unchanged right now, but if access to crypto exchanges becomes a long-term issue in Australia, the crypto casinos and their users will inevitably be affected.
The broader crypto picture in Australia
All this is taking place while the Australian government undertakes its own deep dive into crypto regulation. We mean, of course, the token mapping initiative that the Australia Treasury launched earlier this year. Commentators have devoted thousands of pages to describing the token mapping process, but if we confine ourselves to the broad concept, it is simply a process by which digital assets and tokens are mapped against existing financial instruments so that they can be drawn into the overarching regulatory framework. This might be by making them subject to existing financial rules or, where it is deemed more appropriate, developing new ones.
The initiative was launched in reaction to crypto’s gradual emergence from the fringes to the mainstream. Most in the crypto world assumed that crypto regulation, or lack thereof, would be a matter for debate and then implementation at some point next year when the Treasury finishes its mapping process, comes up with some proposals and makes these public for further debate. The decision by the banks has caught everyone by surprise. Right now, however, all that anyone can do is watch and wait for the dust to settle.
