HSBC Australia has blocked payments from bank accounts and credit cards to cryptocurrency exchanges, citing the risk of fraud as a way to protect customers, a move that has sparked controversy in the industry.
As of July 24, HSBC Australia has officially blocked all payments from bank accounts and credit cards to cryptocurrency exchanges. This move comes after Bendigo Bank, another major Australian bank, also issued a similar policy.
The reason given by the banks is to protect users from the risk of fraud in the cryptocurrency sector, especially in the context that the amount of money Australians lost due to investment fraud related to cryptocurrencies reached 171 million USD in 2023.
is blocking payments to cryptocurrency exchanges
Source: HSBC
Concerns about barriers to market entry
However, the decision by HSBC and other banks has been met with backlash from the community. Amy-Rose Goodey, CEO of the Digital Economy Council of Australia (DECA), said the move was a worrying trend that could deprive people of their “financial rights” in accessing the digital economy.
Ms Goodey called for dialogue between banks and stakeholders in the cryptocurrency sector to establish a clear, fair and forward-looking regulatory framework that both protects users and fosters innovation.
DECA said it was not informed in advance of HSBC's decision and is working with regulators to find a balance between controlling risks and promoting innovation in digital finance.
This incident once again shows the challenges in reconciling the traditional financial system and the nascent cryptocurrency market. Finding common ground between the parties is extremely necessary to ensure sustainable development for both fields.
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