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Citing frauds, the Australian subsidiary of international bank HSBC has advised consumers it has started barring customer payments to cryptocurrency exchanges as of July 24 local time, therefore becoming the latest major bank to avoid the sector.
New Safety Measures Implemented
For your security, HSBC Australia said in a July 24 email to customers describing its “new safety measures,” blocking payments from bank accounts and credit cards we reasonably suspect are being made to cryptocurrency exchanges.
“You will have to arrange other plans if you want to pay for cryptocurrency exchanges.”
HSBC supported its choice with statistics from Australia’s consumer regulator and competition showing that investment frauds cost Australians up to $171 million in 2023. The bank said it was “inconvenient,” but it underlined that its first concern is making sure consumer funds stay safe.
Other Banks and Similar Measures
The measure taken by HSBC followed somewhat more than 12 months following the “Big Four” banks of Australia: Commonwealth Bank, National Australia Bank, Westpac, Australia, and New Zealand Banking Group (ANZ)—limiting payments to bitcoin exchanges.
Not too far behind, Australia’s Bendigo Bank likewise mentioned the necessity of shielding consumers against investment fraud. Managing director of the Digital Economy Council of Australia (formerly Blockchain Australia), Amy-Rose Goodey, informed Cointelegraph they were not “pre-informed” of HSBC’s decision.
Industry Reactions and Future Outlook
Goodey said, “The recent decision by HSBC to block all payments to cryptocurrency exchanges has reignited concerns about the ongoing challenges facing the relationship between Australian banks and the cryptocurrency sector,” adding the action isn’t isolated and reflects a “concerning trend” of restrictions affecting the digital currency community.
“It emphasizes the vital need for communication and better laws supporting creativity while properly addressing possible risks.”
Goodey said that without such communication, many Australians will miss their “financial right” to engage in the expanding digital economy.
Goodey continued, “Clear, fair, and forward-thinking regulations will help banks and industry players be more suited to combat these scams without slowing innovation.” She also mentioned that since last year, the group has acted in the appropriate direction. DECA was included on the National Anti-Scam Center’s advisory board.
HSBC said banking would go as usual and it would still accept consumer payments originating from bitcoin exchanges. From 45 branches all throughout the nation, HSBC Australia now caters to 1.5 million clients.
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