Australia's largest financial conglomerate, Commonwealth Bank, has introduced some restrictions on money transfers to the accounts of certain cryptocurrency exchanges.
It was announced that the bank would now either delay for 24 hours or reject requests to transfer money to the details of "specific digital currency exchanges". The bank declined to say which trading platforms were affected by the decision. Furthermore, there are plans to introduce a monthly limit of up to $10,000 to cryptocurrency exchange credentials in the near future. The aim of these measures is to minimise potential fraudulent activity and increasing customer involvement in the crypto market.
According to a Commonwealth Bank statement, "customers making payments to cryptocurrency exchange addresses now face a much higher risk of fraud".
Westpac, a major Australian bank, had previously banned its customers from transacting with cryptocurrency exchange Binance. The bank said the measure was taken to limit the increase in losses due to fraud.
Binance subsequently announced that its Australian customers could not deposit money to its platform using PayID, a popular instant payment method. Additionally, withdrawals of Australian dollars to bank accounts were suspended. Binance cited issues with one of its third-party payment service providers as the reason for this.
In April, the Australian Securities and Investment Commission (ASIC) revoked Binance Australia's derivatives trading licence. In a statement, they said that trading cryptocurrency derivatives posed an additional risk to customers because it involved the use of leverage.
The Australian regulator has forced banks to increase oversight of cryptocurrency businesses. Financial institutions must submit inspection reports to the supervisory authority confirming that crypto-businesses are complying with solvency rules. This daily monitoring of such companies is now mandatory.
According to experts, stricter regulation will have a negative impact on the fintech market. Moreover, it will be difficult for start-ups to gain access to banking services because of such high entry barriers, which will also reduce innovation in Australia.
