Competition watchdog urged to probe Oz bank 'collusion' in bitcoin shutdown

Competition watchdog urged to probe Oz bank 'collusion' in bitcoin shutdown

Queensland National Senator Matthew Canavan has called on Australia's competition watchdog to investigate the actions of the nation's banks in refusing to handle the accounts of bitcoin startups across the country.

Australia's major banks have acted in concert to advise at least 17 bitcoin companies that there accounts would be closed, citing failure to comply with anti-money laundering rules.

The concerted action by the banks has caused uproar in the local bitcoin community, who have accused the banks of turning out the lights on an emerging industry sector because of competition fears.

Canavan, who sat on a recent committee exploring the use and legitimacy of cyptocurrencies has rushed to the defense of the nascent industry, calling on the Australian Competition and Consumer Commission to intervene.

In a letter addressed to ACCC chairman Rod Sims, Canavan wrote: "The actions by the banks would appear to directly engage competition in the financial services industry as it stands now - and, by effectively nipping in the bud the growth of potential competitors, is likely to substantially reduce the potential for future competition to the detriment of consumers in the future."

Muddying the waters, each of Australia's top four banks are actively exploring the use of digital currencies and the blockchain via initiatives such as the Ripple protocol, or investing directly in the sector vis a vis Westpac's recent backing of US bitcoin exchange Coinbase.

While the banks have remained tight-lipped on the issue, the Australian Bankers Association has rushed to their defence, calling for a clear legal framework for digital currencies and the application of money laundering rules to the sector.

Similar issues are at play in the UK, where the Government has promised a consultation early in this parliament on how existing AML rules could be adapted and applied to digital currency exchanges.

The European Banking Federation has also called for a similar clarification in the application of AML rules across the continent in a recently published blueprint for digital banking.

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