Irish Crypto Exchanges On The Receiving End As Banks Close AccountsIrish Crypto Exchanges On The Receiving End As Banks Close Accounts
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- 02 Jul 2024
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The cryptocurrency landscape in Ireland is facing significant challenges as local banks withdraw their support from crypto exchanges. Despite a substantial increase in the adoption of cryptocurrencies among the Irish population, with approximately 120,000 people now owning digital assets, the banking sector's stance is threatening the growth of this burgeoning market.
The Rise of Cryptocurrency Adoption in Ireland
A study by Amarach Research and Red Flag has revealed a threefold increase in the number of cryptocurrency owners in Ireland over the past four years. Currently, about 2.5% of the Irish population holds cryptocurrencies, indicating a strong upward trend in digital asset adoption.
Banks' Reluctance to Support Crypto Exchanges
Despite the growing popularity of cryptocurrencies, Irish banks have taken a firm stance against providing services to cryptocurrency exchanges. Reports suggest that several exchanges have had their accounts closed, forcing them to seek banking relationships outside the country.
The Impact on Irish Crypto Firms
- Bitcove: This Cork-based Bitcoin exchange has had its accounts closed by major banks, including Allied Irish Banks (AIB), Bank of Ireland, and Permanent TSB. Bitcove has resorted to using banking services from other European banks to continue its operations.
- Eircoin: One of Ireland's oldest Bitcoin brokers, Eircoin, was forced to shut down earlier this year. Co-founder Dave Fleming attributed the closure to a banking system that he described as "negligent and defensive."
Banks' Defense and Regulatory Compliance
Irish banks defend their actions by citing the need to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations. AIB claims it does not discriminate against cryptocurrency firms but must ensure compliance with regulatory requirements. The Bank of Ireland, on the other hand, states that it does not offer services to crypto exchanges as a matter of principle.
Statements from Banking Authorities
The Banking and Payments Federation of Ireland (BPFI), a banking sector group, denied any specific policy mandating the closure of accounts for cryptocurrency exchanges. However, BPFI supports the actions of its members, emphasizing the need to reduce the risk of financial crimes.
The Global Perspective
The challenges faced by Irish cryptocurrency firms are not unique. Globally, banks have often severed ties with crypto businesses, sometimes due to regulatory pressures. For instance, in April, the Reserve Bank of India prohibited financial institutions from allowing their clients to buy cryptocurrencies and ordered banks to stop offering services to crypto firms.
The closure of bank accounts for cryptocurrency exchanges in Ireland highlights the ongoing tension between traditional financial institutions and the emerging digital currency market. While the adoption of cryptocurrencies continues to rise, the lack of banking support poses a significant hurdle. As regulatory frameworks evolve, it remains to be seen how banks and crypto firms can find a mutually beneficial way to coexist.
FAQs
Why are Irish banks closing accounts of cryptocurrency exchanges?
Irish banks are closing accounts of cryptocurrency exchanges to comply with KYC and AML regulations and to reduce the risk of financial crimes.
How many people in Ireland own cryptocurrencies?
Approximately 120,000 people, or about 2.5% of the Irish population, own cryptocurrencies.
What are some examples of affected Irish crypto firms?
Bitcove and Eircoin are two examples of Irish crypto firms affected by bank account closures.
Are other countries facing similar issues with banks and crypto firms?
Yes, banks in other countries, such as India, have also severed ties with crypto firms due to regulatory pressures.
What is the stance of the Bank of Ireland on providing services to crypto exchanges?
The Bank of Ireland does not offer banking services to cryptocurrency exchanges as a matter of principle.
