BitVendo – Official Statement Regarding Bitcoin Banking In Ireland

Date: 21/03/2014

On the 19th of March we were notified by phone that the AIB (Allied Irish Bank) will not be conducting business with Bitcoin related businesses in Ireland.

We spoke several times with the AIB over the phone that day, a quick synopsis can be found below. There is a PDF version of this statement here also.

 

Synopsis of the phone calls that were made with AIB: 19/03/2014

      1st call made by BitVendo @15:14 -
Call to AIB looking for information regarding the opening of an account.

      2nd call made by AIB @15:23: -
The AIB asked about our business model and said they would call back
about their postings on Twitter after checking with their media department.

      3rd call made by AIB @16:01: -
Couldn’t open the account for us, and stated their own tweets were misleading.

      4th call made by AIB @16:16: -
No legal obligation to send out an official statement.

      5th call:
Promised a further phone call by AIB. Nobody phoned.

 

We were informed that the AIB would be -
taking the same stance as the Bank Of Ireland.

Over the phone we were told tweets were made by the AIB clarifying the
situation. We were not made aware of any such tweet or comment and the
location of those tweets are still unknown to us.

AIB have refused to send us a rejection in writing and have refused to put
a name to the decision maker. Their representative told us that she wasn’t sure
if the bank was legally obliged to give us anything in writing and so wouldn’t be
sending us any confirmation on the subject.

 

Head Of Marketing: Giles Byrne took over the 4th phone call, but was stone
walled with vague, empty responses -

I’m only at branch level, the decision came from above, so I can’t comment
any further

No the bank won’t be commenting any further, it has already been posted on
Twitter

When pressured for a name and exact reason we were told -
I don’t know, it came from above, we’re not legally obliged to explain anymore

 

According to our previous contact with Bank Of Ireland, we were told that
they would let individuals use their accounts to buy Bitcoins from foreign
exchanges, but Irish businesses based around Bitcoin would not be supported.

Quote: Alan Donohoe – Founder Of The Bitcoin Foundation of Ireland

The refusal by 2 major Irish banks to open an account for a Bitcoin
related business is stifling beneficial innovation and hurting the
growth of the economy, however, we do understand that the banks are
still trying to figure out this issue and for now its simpler for them
just to say no.

Banks and regulators should recognise they have a chance to create a
truly innovative environment suited to the digital age of today. It
could drag the rest of the financial industry along with it – they
should really step on-board.

A tough approach to regulation based on what may seem an unhealthy
degree of disclosure about their activities, but Bitcoin businesses
could well end up more trustworthy than existing financial
systems. Says Alan Donohoe, of the Bitcoin Foundation of Ireland.

The Reality Of The Situation 

Both banks have said that they were rejecting our applications “due to the
nature of the business”. AIB said “Bitcoin is too risky to work with“.

From a banking point of view there is no risk associated on their end. They
simply accept cash from BitVendo and the money is sent via SEPA transfer
into exchanges (EU bank accounts).

The exchanges are linked to our ATM which executes transactions on behalf of the buyers at the point of sale.

The banks at no point handle Bitcoin, they do not execute any Bitcoin transaction,
they have no contact what so ever in any capacity with Bitcoin. They simply handle
the cash and process it like a regular business.

Thoughts From BitVendo

If our ATM sold Coca Cola then it would be fine, but because it dispenses Bitcoins we are automatically deemed a risk, which is completely untrue and unsupported.

Why is it OK for regular people to use their bank accounts to buy Bitcoin but not a business like BitVendo? The same “risk” exists. Considering BitVendo uses a certified note validator which scans every single note for authenticity, we should be considered safer to work with.

Irish banks are clearly afraid of Bitcoin because its more efficient (transactions are instant) and far more cost effective for end users when compared to traditional banking services.

Transparency In Irish Banking

We have since contacted Bank Of Ireland regarding our letter of refusal but we have not received a reply and have not received any written confirmation to date.

We were promised written confirmation on the 10th of March 2014 by Bank Of Ireland, but we are still waiting for it.

We are now contacting the Ulster Bank and Permanent TSB in relation to this. We would like to see if they will work with Bitcoin businesses in Ireland.

Both bank branches we spoke to are on Dame St in Dublin, we are now contacting AIB and Bank Of Ireland head offices for official comments on the subject. More transparency and co-operation is needed from the banks.

 

Jeremy Allaire, who founded the bitcoin payments company Circle, which raised $9m in venture capital funding and is due to launch later this year in Dublin is one of the people arguing that bitcoiners should work with governments to establish regulations for bitcoin. Allaire is blunt about the transition bitcoin is going through, saying -

“It’s absolutely moving away from its libertarian roots.” source.

 

BitVendo is currently being supplied by Bitcoin miners and traders, which is proving itself to be cheaper and faster than working with banks. We were asked by a journalist just 2 days ago -

“Irish people are generally slow to react to change compared to countries in Asia and America.” source.

Do you still hold that position?

The answer is yes. Just look at the UK and Singapore who are currently making fantastic progress in taxation and regulation, proving themselves true leaders in innovation. We need to pick a direction.

Regards,
Megan Dolan
CEO – BitVendo

 

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