Banks cite money laundering and other compliance risks related to cryptocurrencies as reasons not to engage cryptocurrency companies.
National Australia Bank( NAB), one of Australia’s big four lenders, has played down allegations that its business relationships have largely excluded cryptocurrency companies, according to reports published by Reuters.
The publication reports that NAB and another major bank, Westpac, have sought to defend themselves against accusations that they have refused to do business with cryptocurrency companies in the country.
According to media reports, two of Australia’s cryptocurrency exchange platforms and a Singapore-based payment company were among those who complained to lawmakers. The two exchanges, Bitcoin Babe and Aus Merchant, have denounced the fact that the country’s four major banks do not provide services to them.
On the other hand, the Singaporean company Nium informed the commission that it has access to banking services in 40 countries, but not in Australia.
Banks highlight risks of cryptos
NAB and Westpac officials told a parliamentary committee on Thursday that their policies were in no way applied deliberately to stifle competition. Lenders have come under fire at a time when many Australian financial institutions are still finding it difficult to do business with crypto-focused companies.
According to financial institutions, the broader crypto sector still carries huge trading risks despite the massive growth seen over the past year.
Ross McEwan, CEO of NAB, explained to lawmakers that the bank does not have a specific policy for cryptocurrency businesses and that the lender does not exclude any customers per se.
However, he acknowledged that NAB did not serve cryptocurrency-related customers. He then clarified that working with cryptocurrency companies is a decision that depends on the profitability of the company and the bank’s opinion on potential risks.
“We need to look at where the cryptocurrency is going, with the reserve bank and regulators. And what is the risk within the bank of dealing with cryptocurrency providers as well, ” McEwan told MPs in a statement quoted by Reuters.
The same concerns were highlighted by Westpac CEO Peter King, who pointed out that anonymous cryptocurrency transactions are a sticking point when it comes to combating money laundering and terrorist financing.
The parliamentary commission is working to find the best way to regulate crypto assets in Australia.