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Is Crypto the Answer to Australian Banks Invading User Privacy?

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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:

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





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El Salvadorians take to the streets to protest Bitcoin law

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Protesters calling themselves the Popular Resistance and Rebellion Block have come out against El Salvador’s government passing a law making Bitcoin legal tender.

A Tuesday tweet from local news outlet El Mundo shows El Salvadorians carrying banners saying “no to Bitcoin” in the streets of San Salvador demanding a repeal of the country’s Bitcoin law. Legislative assembly members Anabel Belloso and Dina Argueta addressed the protesters after first meeting the group separated by a barrier of razor wire.

In a letter made available at the protest, the Popular Resistance and Rebellion Block group claimed that President Nayib Bukele passed the law making the cryptocurrency legal tender in the country without proper consultations with the people. It also cited the volatility of Bitcoin (BTC), comparing investing in the cryptocurrency to playing the lottery: “betting on the lottery is a voluntary act, while Bitcoin is required by law.”

Related: Coercion and coexistence: How El Salvador’s Bitcoin Law may change global finance

However, the group’s main grievance around the Bitcoin legal framework seemed to be centered around a perceived disparity in the cryptocurrency’s usage by the government when compared with the average resident in El Salvador. Protesters said Bitcoin “only serves some large businessmen, especially those linked to the government, to launder ill-gotten money.”

“Entrepreneurs who put their capital in Bitcoin will not pay taxes on their earnings,” said the letter. “In addition, to apply Bitcoin the government will spend millions of dollars of the taxes paid by the people.”

They added:

“Bitcoin would facilitate public corruption and the operations of drug, arms and human traffickers, extortionists and tax evaders. It would also cause monetary chaos. It would hit people’s salaries, pensions and savings, ruin many MSMEs, affect low-income families and hit the middle class.”

Though passed by El Salvador’s government and signed into law by Bukele in June, the law recognizing Bitcoin as legal currency in the country will not go into effect until Sept. 7. The Popular Resistance and Rebellion Block’s protest was aimed at government officials to demand the law be repealed. In addition, the World Bank has also refused to help El Salvador transition to a Bitcoin-friendly framework, given its “environmental and transparency shortcomings.”

Related: What is really behind El Salvador’s ‘Bitcoin Law’? Experts answer

During a scheduled visit by the U.S. State Department earlier this month, Under Secretary of State for Political Affairs Victoria Nuland suggested El Salvador ensure Bitcoin is well regulated and transparent, but did not explicitly say anything against the country’s move to a more digital economy. Some proponents of the law including Bukele have suggested Bitcoin could help facilitate remittance payments from El Salvador citizens living abroad and lessen the country’s reliance on the U.S. dollar.