The Australian arm of international bank HSBC has informed customers it has begun blocking customer payments to cryptocurrency exchanges as of July 24 local time, becoming the latest major bank to shun the industry, citing scams.
âFrom 24 July 2024, HSBC will block payments from bank accounts and credit cards that we reasonably believe are being made to cryptocurrency exchanges, for your protection,â HSBC Australia said in a July 24 email to customers explaining its ânew safety measures.â
âIf you wish to make payments to cryptocurrency exchanges, youâll need to make alternative arrangements.â
To back up its decision, HSBC cited data from Australiaâs competition and consumer regulator stating that Australians lost up to $171 million from investment scams in 2023.
The bank apologized for the âinconvenientâ change but stressed its priority is to ensure customer money remains safe.
HSBCâs move comes a little over 12 months after Australiaâs âBig Fourâ banks â Commonwealth Bank, National Australia Bank, Westpac and Australia and New Zealand Banking Group (ANZ) took similar action to restrict payments to cryptocurrency exchanges.
Australiaâs Bendigo Bank followed suit soon after, also citing the need to protect customers from investment scams.
Amy-Rose Goodey, managing director of the Digital Economy Council of Australia (previously Blockchain Australia), told Cointelegraph they were not âpre-informedâ of HSBCâs decision.
âThe 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,â said Goodey, adding the move isnât isolated and reflected a âconcerning trendâ of restrictions that affect the digital currency community.Â
âIt underscores the critical need for dialogue and improved regulatory frameworks that support innovation while addressing potential risks effectively."
Related: Australiaâs peak crypto lobby group drops âblockchainâ from name
Without such dialogue, Goodey said more Australians will lose out on the âfinancial rightâ to participate in the growing digital economy.
Goodey added that by establishing âclear, fair and forward-thinking regulations,â banks and industry players will be better positioned to combat these scams without slowing innovation. She also added that the association has taken some steps in the right direction since last year. DECA was added to the advisory board of the National Anti-Scam Center.Â
HSBC said it would still accept customer payments coming from cryptocurrency exchanges and that banking would continue as normal.
HSBC Australia currently serves 1.5 million customers from 45 branches throughout the country.
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