The National Australia Bank (NAB) has decided to dissociate itself from bitcoin, informing bitcoin-related customers it will be closing their accounts next month.
The news is significant as NAB was previously Australia’s most bitcoin-friendly bank, with their representatives actively seeking to build relationships with bitcoin businesses and working with them to understand digital currency issues like fraud prevention.
An Australian trader who operates through LocalBitcoins.com received a letter today informing him of the change in direction. It reads:
“NAB has a responsibility and commitment to continually review its risk profile and the businesses we bank, ensuring that those businesses do not pose risks to NAB.
NAB has recently conducted a review of businesses that trade in digital currencies and has determined that digital currency providers pose an unacceptable level of risk, both to our business and reputation.
As a result of this review, NAB has decided to stop providing banking services to you and will close your accounts, effective 2nd May 2014.”
The letter, which bears a signature but no typed name, said it would return any remaining funds with a bank check and provided a free customer support number to call with any questions.
The customer, ‘Yo Shima,’ who trades bitcoins face-to-face as AusBitcoins, said he was in good standing and there had never been any hint of fraudulent or other untoward behavior associated with his business or bank account. He is currently one of Australia’s most active over-the-counter bitcoin traders, buying and selling about AU$50,000 worth per week on average since he began almost a year ago.
Other bitcoin-related businesses in Australia confirmed they had also been informed NAB was turning its back on bitcoin, and were currently working with other financial institutions to establish a more reliable relationship.
Banks and bitcoins
Australia’s banking industry is dominated by the ‘Big Four’ corporate banking groups: NAB, ANZ, the Commonwealth Bank and Westpac. Of the four, Commonwealth had previously been the one most hostile to bitcoin, while ANZ reportedly works with digital currency businesses on a case-by-case basis. Westpac’s policy remains unknown.
NAB produced a report on bitcoin for its currency traders last December, where it compared bitcoin and digital currencies with existing national currencies. The report was generally curious and neutral in tone, but said bitcoin would take a few more years to achieve mainstream acceptance.
The bank did not give a reason for its policy change, however Mizuho, one of Japan’s largest banks, may have spooked other large banks around the world when it was named as a defendant in the US class action lawsuit against departed exchange Mt. Gox. The complaint stated that by continuing to provide banking services to Mt. Gox, Mizuho “profited from the fraud”.
Australian $100 image via Shutterstock