Is Crypto the Answer to Australian Banks Invading User Privacy?

Reports are emerging of Australian banks demanding customers complete detailed invoices over their use of funds as a condition for honoring transactions. Time for crypto to take over completely? 

Australian Banks are Now Asking Invasive Questions

Crypto reporter and analyst Alex Saunders has noted that he is receiving reports that banks are now demanding customers to explain what their money will be used for before honoring withdrawals. Saunders has tweeted:

Breaking News: Reports Australian banks are now requiring customers provide invoices explaining what the money is being used for when withdrawing cash OR transferring funds electronically. Money in a bank, is not your money. 🏦💰🔐 pic.twitter.com/eEzWVg81IK

— Alex Saunders 🇦🇺👨‍🔬 (@AlexSaundersAU) March 6, 2020

He also posted screenshots of banks refusing to honor deposits without being told the source of the funds. Whether or not Australian regulators are forcing banks to take these steps is unknown, yet changes to KYC requirements are often made without public notice. It is also unknown if these steps are related to the increasing embrace of crypto by the Australian public, yet it would certainly not be surprising if this were the case. 

Among western governments, Australia’s has thus far been the most restrictive toward crypto. The country’s tax office now aggressively pursues persons believed to be evading crypto-related taxes. Also, the anti-money laundering agency, AUSTRAC, recently revoked the licenses of three exchanges.  

Crypto Continues To Challenge Financial Sector

As interest in crypto soars, banks are finding themselves increasingly squeezed between the desire to serve customers, and the need to obey financial laws. For decades governments have required to help fight financial crimes. Banks must follow a range of KYC and AML laws, yet these regulations are extremely difficult to enforce within the crypto space. They also tend to alienate law-abiding customers.

Also, as blockchain technology threatens to make many legacy banking practices obsolete, it also has much to offer. For example, crypto wallets eliminate the need for consumers to have traditional bank accounts, yet services such as Ripple make cross-border transfers vastly more efficient and secure. 

It is this vastly complex nature of the emerging blockchain sector that is forcing banks to rethink their stance on crypto. The same, of course, is true with governments. There is no question that they, too, have much to gain from embracing the ensuing wave of mass adoption. Nevertheless, as the use of borderless, anonymous digital assets grows, for now, it is not surprising that these institutions are taking greater steps to assert authoritarian control. 

It is reasonable to assume that as crypto adoption becomes more common, more steps will be taken to track individual assets. It appears that for now banks and governments are not yet comfortable with their citizens having true anonymity when it comes to financial matters. 

What do you think about the latest prying move of Australian banks? Share your thoughts below! 

Images via Shutterstock, Twitter: @AlexSaundersAU