Australian Banks Close Bitcoin Exchange Accounts

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Banks and businesses in Australia are shunning virtual currency Bitcoin.

Thirteen leading banks have simultaneously frozen or closed Bitcoin exchange current accounts effectively closing off the banking system to users of the currency.

Businesses have also turned their backs on the online currency after reporting little or no interest in spending Bitcoin in the country.

Although the banks all seemed to act following a coordinated plan against Bitcoin exchanges, they refuse to comment on the measure and are referring all questions to trade body, the Australian Bankers Association.

The ABA reckons Australia is home to around US$245 million or 7% of the world’s $3.5 billion worth of Bitcoin.

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Risk to consumers and banks

The move is the first closure of a country’s banking system to Bitcoin, although banks in many nations, including the US and Britain, do not carry accounts for the virtual currency.

The ABA conformed the decision to close Bitcoin accounts was voluntary and not due to government pressure.

“It’s up to others to decide whether the closure was co-ordinated,” said an ABA spokesman. “However, our view is virtual currencies have no regulator supervising them and lack transparency.

“We feel this is a risk to users and the banking system.”

Bitcoin exchanges outside Australia have been dogged by hacking and fraud scandals that have seen millions of pounds of the virtual currency lost by investors.

Australia had 17 Bitcoin exchanges, of which 13 have closed and four are ‘considering their options’.

Bitcoin goes offline in Venezuela

Meanwhile, a Venezuelan telecoms company has reportedly blocked dozens of Bitcoin web sites in a government backed effort to outlaw the virtual currency.

Venezuela, together with Brazil and Argentina has seen a surge in Bitcoin usage as currencies have plunged against the US dollar and inflation has soared.

Allegedly, Bitcoin is serving as a hedge against devaluation in the same way as investors shift into gold in times of economic uncertainty.

A leading exchange is helping users break the embargo by feeding web services through proxy servers.

“The news is reporting the sanctions against Bitcoin providers as an internet outage, but only Bitcoin sites seem affected and even their Wikipedia pages are inaccessible,” said reports on social media site Reddit.

The move is probably aimed at restricting Bitcoin users shifting foreign currency out of Venezuela.

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