CBA's Fraud Claim Backfires

Are the increasingly-desperate attempts by major banks to hobble cryptocurrencies symptomatic of the death throes of the banking behemoths?

According to claims filed in the New South Wales district court, the former wholly-owned subsidiary of the federal government sent warning letters to several customers of Colombian/Australian exchange service Colcambios Australia advising them that the money Abuela sent for their birthday had possible links to organised crime.

Colcambios is one of a new breed of currency exchange platforms leveraging the portability of cryptocurrencies to reduce the transaction costs involved in sending money from one jurisdiction to another. Widespread adoption of the platform could save the people of Colombia up to four hundred million dollars per year, currently spent accessing more traditional services such as Western Union. The banks, who control the bulk of foreign exchange transactions, and the Federal Government - which would prefer to retain control of the currency we use - have become more strident in their denouncements of any disruption to their cosy ecosystem.

The latest salvo in the banks’ proxy war against the politically inconvenient appears to have backfired for CBA. Hit with a defamation suit over the absurd claims made about the operations of Colcambios Australia, the news added further downward pressure to CBA’s already-sliding share price. The warnings, themselves somewhat reminiscent of phishing attempts claiming the target has breached some tax law or other, have been seen by the market for what they are, thuggish bullying.

After systematically denying ordinary Australians access to everyday banking services on the basis of their opinions, or the industries they work in, the banks have no grounds to complain when customers rightly take their business elsewhere. Continuing to toe the government line on cryptocurrencies will very soon start to bite for the banks as savvy investors - who have long seen the potential of crypto - also look for other opportunities.