Crypto-friendly Banks in New Zealand
We get a lot of customers asking who are the crypto-friendly banks in New Zealand.
The short answer is: none of them.
But, that doesn’t mean your bank is going to close your account for trading crypto! That’s very rare and we’ve never known it to happen to an Easy Crypto customer, and we have customers with very large volumes going through their accounts.
While no banks are outright crypto fans, some banks are friendlier than others, and many even have official policy statements so that you know where you stand when buying and selling crypto from your bank account.
In this article, we will try to dispel some of the myths around crypto and banking.
Myth: Banks are afraid of crypto
People think banks are afraid of crypto, but that’s not the case. While banks probably should be worried about the disruption from cryptocurrencies, that’s not really on their radar at the moment. What they are worried about is money laundering and the risk they could be exposed to from customers in the crypto space.
Think about it from a bank’s point of view – if you open your doors to cryptocurrency users, in particular high volume traders and cryptocurrency businesses, and one of those customers is laundering money through bitcoin, you could face serious fines or even the loss of your banking licence.
The upside (revenue from crypto traders) is pretty small but the downside (losing your banking license) is pretty significant. If you were a billion-dollar business, would you take that risk?
Banks are just making logical choices based on the risks and rewards they face. What could be more helpful here is for the Reserve Bank to provide greater certainty to banks around where the risk sits, to give them comfort to take on customers in the crypto and blockchain space.
Myth: My bank will close my account if I buy crypto
As far as we know, not a single customer of Easy Crypto has had their bank account closed for buying/selling crypto with us. However, because of concerns from customers (whether real or imagined!), we changed our legal and bank account name to “EC Group” so that no mention of bitcoin or crypto will appear on your bank account when you buy through us. Better safe than sorry, eh!
Bank policies in New Zealand
So, what’s your bank’s view on cryptocurrencies? Below are some statements from reputable banks in New Zealand regarding the crypto space. Read on to find out…
Kiwibank published the following statement regarding cryptocurrencies, saying that personal trading is ok:
”We are generally happy for customers to transact in Bitcoin or other cryptocurrencies, using their Kiwibank accounts, when it is for their own personal use. However, as with any transaction (cryptocurrency-related or otherwise), if we suspect that it may be associated with illegal activity, our usual systems will kick in to prevent this activity.
At the moment we’re also not able to provide banking services to businesses or people who are handling cryptocurrency on behalf of third parties (for example, running a cryptocurrency exchange). This is because the nature of cryptocurrencies plus handling transactions for the benefit of third parties increases anonymity too much.”
View their full statement here.
Bank of New Zealand (BNZ)
The BNZ have come out saying that personal use might be ok, but on a case-by-case basis:
“We are very conscious that our customers rely on us to have the safest and most secure banking system possible, so with everything we do at BNZ we try to maintain the delicate balance between being as least intrusive as possible so that our customers can do what they want, but secure enough so that no one is compromised.
In terms of our current position with regards to cryptocurrencies – BNZ is constrained by regulation and legislation implemented by the RBNZ and FMA. While recognising that most virtual currency traders will be legitimate and lawful, the way cryptocurrencies are designed to work means that they clash against some of this legislation – specifically around the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. As a result, our policy is not to provide banking services for virtual currency dealers for whom dealing in cryptocurrencies is their primary business. Please note though, a user of virtual currency is not classified as a dealer for this purpose and may be offered banking services on a case-by-case basis.”
This statement was provided to us via email, as far as we know no official statement has been published online.
Australia and New Zealand Banking Group (ANZ)
The ANZ has an interesting relationship with cryptocurrency, in that they provide bank accounts for some large crypto businesses (not us!) but have not come out with any official statement either way on crypto.
However, we spoke with ANZ recently and they’ve told us that they’re happy for their customers to purchase cryptocurrencies for personal use.
Westpac has made the following statement regarding cryptocurrencies, saying that personal trading is ok:
“Westpac NZ encourages anyone interested in purchasing crypto-currencies to do their due diligence, so that they fully understand the technology and all risks involved. We have recently reviewed our policy regarding customers purchasing crypto-currencies and we allow this for personal use. We assess on a case-by-case basis. If the person is a trader of crypto-currencies or does not meet our customer due diligence (CDD) we may review our relationship with them. Westpac customers can use their Westpac accounts to carry out transactions with legitimate crypto-currency exchanges.”
We understand from Westpac’s comms team that this statement was published on Westpac’s social media account, but we haven’t found a copy of the original post.
There’s no official policy from ASB but we’ve all heard about the time they shut down Cryptopia’s account.
And that definitely wasn’t a one-off – we’ve also seen some ASB anti-crypto action closer to home!
In October 2017, before Easy Crypto started, Alan was buying cryptocurrencies for himself and me (his sister). He got a call towards the end of that year from ASB who had noticed these cryptocurrency transactions and asked who they were for.
Over the phone, ASB told Alan that buying for himself and his family was allowed. However, in June 2018 Alan received a letter from his bank stating that his account would be shut in 14 days. No questions asked.
As many of you may know, Alan is a bit of a digital nomad. This happened while he was in Vietnam, so having all accounts closed, including credit and debit cards while overseas was a bit of a nightmare, to say the least!
When contacted, all that ASB would say was that Alan couldn’t do proper KYC checks on his own sister. KYC stands for “know your customer” and requires businesses to know things about their customers, like their name, date of birth, address etc. I’m not sure about you, but I would reckon that my sibling has a pretty good idea of my key details!
Again, we’ve never heard of any Easy Crypto customer having their bank accounts closed, so hopefully, Alan was a (bizarre) one-off!
So what’s your story?
That wraps up our NZ bank overview. We’d love to hear what your experience has been so we can continue to push for better attitudes from New Zealand banks towards cryptocurrencies.
Have you talked to your bank about their view on cryptocurrencies?
Speaking of crypto – as of this writing, Bitcoin is trading at NZD $68,046.21 with a market cap of NZD $1,272,633,254,128.
What are you waiting for? Now’s a good time as any to invest in BTC!
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Last updated April 23rd, 2021.