National Australia Bank will close the accounts of customers who trade in Bitcoin digital currency.
One of the businesses affected by this decision is CoinJar, a Melbourne-based Bitcoin marketplace. CoinJar provides an online “wallet” or account for storing bitcoins and exchanging them with Australian currency.
This is the second time CoinJar has faced difficulties with banks due to the nature of its business. Last year the Commonwealth Bank closed CoinJar’s business account along with personal accounts of the company’s co-founders, Asher Tan and Ryan Zhou, without warning.
Mr Tan said he appreciated that NAB at least gave CoinJar time to move to another bank.
A National Australia Bank spokesman said that the bank “does not bank or trade in unregulated currencies, or have any plans to do so.”
The status of Bitcoin and other digital currencies remains ambiguous in financial and legal systems around the world. The Australian Transaction Reports and Analysis Centre (AUSTRAC) does not regard Bitcoin as a currency because it is not backed by gold.
The Australian Tax Office is expected to provide advice later this year for businesses filing tax returns for the 2013-2014 financial year. In the United States, Bitcoin is treated as property and subject to capital gains tax.
In spite of these challenges, Melbourne’s Bitcoin community is growing and eager to educate the wider public about digital currencies. The Melbourne Bitcoin Meetup, founded by CoinJar’s Asher Tan, began with ten people and now attracts around a hundred to its meetings.
Mr Tan said he was inspired by the values of the open source community that made Bitcoin possible and wanted to spread these values to the wider public. He said the value of Bitcoin lies in its being used in trade, rather than hoarded for speculation purposes, because “the true value is not in the dollar value … but what you can do with it.”
These values are shared by Dale Dickins, who was one of the first people to introduce the Lamassu Bitcoin Machine to Australia.
The machine provides an accessible entry into the Bitcoin market for non-technical users by converting a cash deposit into bitcoins held in an electronic wallet. Ms Dickins’ aim is to raise public awareness about Bitcoin and other digital currencies.
She has demonstrated the Lamassu machine at events around Melbourne. She said she welcomed the appearance of Bitcoin machines in other parts of Australia, such as the Robocoin ATM recently introduced in Sydney.
Both Mr Tan and Ms Dickins said they were eager to share stories that demystify Bitcoin and demonstrate the life-changing or even world-changing potential of digital currencies.
Ms Dickins has begun making a documentary about Bitcoin users in Melbourne and said she will film the same individuals and businesses every three months to follow changes in the currency’s use.
CoinJar is redeveloping its company website and will begin featuring interviews with Bitcoin users on its blog.
[Written for, but not published on, The Citizen.]