Australia's Big Four Banks to be Regulated by Government to Avoid Blockchain Monopoly

Australia's "big four" banks will be closely monitored by the country's competition regulator, as will any purchase of financial technology or blockchain startups.

The Australian Competition and Consumer Commission (ACCC) will review any attempt by Australia's major banks to acquire financial companies, and the organization's chairman Rod Sims said that the technology developed by these financial companies is mainly blockchain solutions. For a year, the financial technology revolution has been repeatedly discussed, and now the banking industry sees it as the biggest threat.

Australia's "Big Four" banks - Commonwealth Bank of Australia (CBA), Westpac, National Australia Bank (NAB) and Australia and New Zealand Banking Group (ANZ) - have so far avoided serious competition from the financial technology sector. However, areas such as payments, remittances, foreign exchange and peer-to-peer lending could be significantly impacted by technologies such as blockchain. For example, in addition to ANZ, the other three of the Big Four are members of the R3 private banking blockchain consortium.

Reuters talks about the country’s fintech space, saying that the four major banks control 80% of Australia’s lending market and that these banks are likely to acquire startups that pose a threat. Sims said:

“I think as an organization we need to watch these things carefully. That means making forward-looking judgments. Will fintech and blockchain be disruptive in the future? Right now, it may seem small. But what capabilities can they unlock in the future?”

Monitoring blockchain

Sims further revealed that the ACCC, as a regulator, is now paying close attention to the development of the blockchain industry. Globally, the financial industry leads many companies, including healthcare and entertainment, that are working hard to explore the potential of blockchain solutions to simplify existing traditional systems and save the cost of infrastructure transformation.

Until recently, however, standardizing blockchain-based solutions has been a shaky ground. Incidentally, Australia also has an international technical committee that develops blockchain standards around the world as part of the International Standardization Organization (ISO).

Bitcoin Technology in Australia

Australia will lead the International Organization for Standardization in establishing blockchain standards.

Depending on the collaborative nature of blockchain, Sims revealed that big banks may need to obtain ACCC permission before they can participate in blockchain projects.

The ACCC is also considering a collective proposal from the big four banks to ask technology giant Apple to allow them access to Apple's mobile payments platform Apple Pay.

As for the impasse, Sims said it was a "very complicated matter."

You can think of this as someone challenging the banks in a sense. The world's largest companies want to keep their identity. We are trying to mediate.

Bitcoin History

Cryptocurrency enthusiasts will recall that the ACCC once publicly investigated the bank accounts of Bitcoin companies that were closed by Australian banks.

In 2015, Queensland senator Matthey Canavan urged Sims and the ACCC to investigate the possibility that banks were engaging in anti-competitive behavior after closing and refusing to provide banking services to bitcoin operators, but no formal explanation was given.

Senator Canavan wrote in a letter to the committee chair:

“The bank’s actions appear to be directly engaging competition in the financial services industry, and now, by effectively slowing down the development of potential competitors, it may significantly reduce future competitiveness to the detriment of consumers.”

The action led directly to the ACCC investigating Australian banks. A few months later, the banks collectively closed the bank accounts of at least 17 Bitcoin companies.