Australia’s peak financial intelligence agency AusTrac is unconcerned about the use of Bitcoins in Australia despite its lack of regulation and links to the illicit drug trade.
AusTrac CEO John Schmidt today said while the use of Bitcoins locally for goods and services transactions remains limited, Australia’s strict currency transfer oversight would keep their use in check.
Australia is one of the few countries in the world which collects information on all international funds transfers in and out of the county.
“You will hear the odd story about a pizza parlour in some part of the world that is suddenly taking bitcoins,” he told a senate committee hearing this week, but said in the majority of scenarios within Australia bitcoin holders will have to transfer their bounty back into AUD before they can use it.
“Because we get the international funds transfers instructions it is possible using other intelligence sources to identify transactions where people are purchasing bitcoins," he said.
“At some point a person will be purchasing bitcoins using, for example, Australian dollars and then, it they are dealing in substance or services, they will want to convert those bitcoins back into legitimate currencies...so they can gain the full benefit of them.”
He cited a recent case of a Victorian Silk Road customer whose drug importation was exposed to authorities thanks to the conversion between Bitcoin and AUD.
However, Schmidt did acknowledge AusTrac would not be able to monitor Bitcoin transactions of Australians holding foreign currencies in overseas accounts.
He said electronic currencies had formed “a major topic” generating “a great deal of interest” at a recent meeting of the international Financial Action Task Force.
But Schmidt maintained that Bitcoin-based crime would not become a priority for his agency in the foreseeable future, as the currency's volatility and insecurity were acting as a brake on mainstream usage.
“Because they are not backed by the government, because they are floating in the ether and there is no regulator as such, there is volatility and exposure to individuals using them.
“That is not to say that there may not be developments in cryptology and willingness by more businesses to start using them so that they do begin to take on more of a commercial life," he said.
“But at this point in time, when you consider all of the existing threats that we face from a criminal perspective, they are not top of the list."