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Bitcoin flounders in Australia as regulatory worries bite
[SYDNEY] Australian businesses are turning their backs on bitcoin, as signs grow that the cryptocurrency's mainstream appeal is fading.
Concerns about bitcoin's potential crime links mean many businesses have stopped accepting it, a trend accelerated by Australian banks' move last month to close the accounts of 13 of the country's 17 bitcoin exchanges.
The development is a blow to hopes of bitcoin fans that the currency can play a significant role in everyday business transactions in developed economies, with Australia once seen as one of its most promising markets. It is estimated to hold 7 per cent of the currency's $3.5 billion global value, a sizeable figure in a country of just 24 million people. "We've got a squeaky clean reputation, and that's actually worth a lot more to us than dipping into this," said James Snodgrass, principal of Sydney's Forsyth Real Estate, which ditched the currency in late 2014 after the firm was investigated by the federal tax office.
Forsyth had offered to collect home deposits and other realtor fees via bitcoin to cater to international buyers. The tax office probe found no wrongdoing but Forsyth was burned by the negative publicity and bailed out before ever taking a bitcoin payment.
Although most mainstream banks in Europe and the US already refuse to keep bitcoin-affiliated accounts, developments in Australia represent the first coordinated shutdown of bitcoin exchanges by a country's banking system.
The move makes it much harder for people to convert regular currencies in to or out of bitcoin, threatening its long-term value. "It really runs on people using bitcoin, and if nobody uses it then it's worthless," said University of Technology Sydney senior finance lecturer Adrian Lee.