Banks steer clear of bitcoin-trading platforms
Dealers of bitcoin and other cryptocurrencies are facing headwinds as mainstream New Zealand banks refuse to provide them with transaction accounts.
Digital currencies are mostly used in speculative trading, although some retailers accept bitcoin and then convert it back to dollars.
A company called Coingrid was due to launch a trading exchange this month and had to abandon it because four main banks it approached refused to provide banking services.
Bank of New Zealand said its policy was not to provide banking services to virtual currency dealers who traded in cryptocurrencies as a business.
‘‘The way cryptocurrencies are designed to work means there’s a clash with some of the legislation that we operate under, specifically around the AntiMoney Laundering and Countering Financing of Terrorism Act 2009,’’ BNZ said.
ASB said it was unable to comment on specific customers, and the bank reviewed its relationships with cryptocurrencyrelated businesses on a case-bycase basis.
ANZ said it didn’t facilitate the issuing, dealing, or exchange of cryptocurrencies. ‘‘We take a very cautious approach.’’
Coingrid chief executive Chai Kim said his colleagues were surprised to find New Zealand mainstream banks didn’t embrace the cryptocurrency movement.
The company had planned an initial coin offering on November 23, and had been in touch with the Financial Markets Authority to ensure it complied with the rules.
‘‘We were going to do a crowdfunding capital raising. But if we can’t process New Zealand currency, how can we do it?’’ Kim said.
‘‘There have been various cases of cryptocurrency businesses and investors having their accounts shut down by banks. This undermines New Zealand’s ability to enter the fourth industrial revolution.’’
A cryptocurrency exchange in Christchurch called Cryptopia also faced problems when its bank withdrew support, but it eventually found a small regional bank prepared to sign it up.
A Cryptopia spokesman said the firm needed bank accounts for general business operations and also to facilitate public access to converting cryptocurrencies back to New Zealand dollars.