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Cryptocurrency has undergone a transition from hero to – if not zero – at least something of a villain in Australian finance circles over recent months. The campaign began with the fall of FTX last year, and has been gradually stepped up in the light of the ongoing issues with Binance.
It has led to many Australian banks placing restrictions on crypto transactions, restrictions that crypto traders and advocates feel are an unfair over-reaction. Local crypto body Blockchain Australia has decided that enough is enough and it is time to fight back. Australia’s largest bank, CBA, led the way with the restrictions, making vague allusions to "scams and the amount of money lost by customers," and others predictably followed.
Blockchain Australia’s director is Jackson Zing. In a prepared press statement, he described the restrictions imposed by CBA and others as “a profound curtailment of economic freedom in Australia." He went on to say that every individual “has the inherent right to make decisions on how and where to use their finances” and that banks were overstepping their role, which is to “facilitate these decisions, not to impose restrictions upon them.”
Costly side effects are not just financial
Mr Zing’s statement went on to discuss the potential side effects of the restrictions, and argued that they could prove more costly than the risks against which they are supposed to be guarding. He said the restrictions are not just limiting how consumers can use of their own money, which is bad enough. He said they will also force those who are most at risk of scams and frauds into shifting their behavior into some alternative direction, which could ultimately place them in graver risk of other frauds that are harder to detect.
From casinos to condos – crypto use was on the rise
Until the restrictions were introduced a few weeks ago, Australia was something of a hot spot for crypto. Yes, many had some bitcoin and altcoins in their investment portfolios, but its use went beyond that, and people were starting to spend crypto in the way it was originally envisaged – that is, to purchase goods and services.
Australia’s fondness for a wager has certainly been a driving force here, which is not without irony given the intrinsically risky nature of crypto. Australians gamble more per household than any other country, and in 2020/21 in particular, with physical casinos heavily restricted, more chose to consult online review sites and find the best online casinos at CasinoAus. Due to other potential banking issues, “the best” often meant finding an Australian casino that accepted crypto, to keep transactions secure, swift and confidential.
Casino gaming might have been a major driver, but it was certainly not the only one. Music concerts in the Metaverse are financed with crypto and some real estate companies have even been completing house purchases, paid for using Bitcoin.
The future is now
The point that Mr Zing is keen to make is that blockchain is not some future state, it is here and now. The restrictions being implemented by banks are certain to leave crypto users in the lurch, or selling cheap as a gut reaction to the hysterical newspaper headlines.
Blockchain Australia aims to reverse that trend with a consumer education program that will be even handed. It will focus on crypto and its benefits before exploring topics like how to identify when you are being scammed and what help the banks and other bodies can provide. Mr Zang as also proposed that the banks should take a cooperative stance on this approach and should publicly acknowledge these education practices, lending support where appropriate and channeling its risk mitigation activities accordingly.
He suggested that “providing opt-in protection and education to users” or targeted approaches to specific at-risk customers might ultimately prove to be a more effective solution to permanently reducing crypto-related scams without the downsides that are part and parcel of payment restrictions.
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