National Australia Bank (NAB) terminates account processing for Bitcoin operators such as exchangers, trading platforms and other units of the online economy. The risky nature of the virtual asset is mentioned as the main reason behind the decision.
APR 11, 2014
National Australia Bank Discontinues Partnership with Bitcoin Operators
National Australia Bank (NAB) terminates account processing for Bitcoin operators such as exchangers, trading platforms and other units of the online economy.
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On May 2 NAB will discontinue all accounts belonging to business customers engaged in trade of Bitcoin and other cryptocurrencies. At present the bank is sending warnings to companies that will potentially be affected.
The message received by entrepreneurs says that digital currencies threaten to harm the business and reputation of NAB. However, the institution has never performed any Bitcoin transactions, but only provided banking services to companies who did.
The spokesperson of the bank confirmed the information:
“NAB continually reviews its risk profile and the businesses we bank, ensuring NAB's activities are in the best interest of our customers and our shareholders.”
Similar decisions were recently made by the Bank of Ireland and the Bank of Montreal to limit possible connections with the online crypto-currency market.
CoinJar, the biggest Bitcoin trading company in Australia, voiced its disappointment after receiving the above mentioned message. Although, cofounder Asher Tan is happy to have received a letter in advance, as the Commonwealth Bank interrupted cooperation suddenly without warning.
According to many experts, the decision might harm many companies inside and outside the crypto-currency environment. The potential victims are not only exchange services.
Robert Masters, chief executive of digital currency trader Krypto Currency Solutions has noticed tension between the Bitcoin society and the banking industry in Australia.
Professor David Glance, who is a Bitcoin expert and the director of software practice at the University of Western Australia, believes that the risks are exaggerated by NAB. He describes the local market as very humble without global leaders such as Mt.Gox. The underdeveloped branch cannot provide particular damage. According to him:
“Unless they had evidence that the companies they were dealing with were actually doing something in particular, it's an odd reaction.”