It is being reported that the Australian Transaction Reports and Analysis Centre (also known as Austrac) is able to and is actively tracking conversions from the Australian dollars to bitcoin and vice-versa.

The government agency is responsible for preventing money laundering and terrorism financing, so it doesn’t quite come as a surprise that they would be following these types of transactions.

“Australia is very fortunate among its international counterparts, in that we are one of the few countries which currently collects all international funds transfers, into or out of Australia,” said John Schmidt, head at Austrac.

“At some point, a person will be purchasing bitcoin using Australian dollars, for example, and then if they are dealing in substances or services, will want to convert those bitcoins back into the legitimate currencies of where ever they are, so they can gain the benefit of them.”

He continues:

“Because we get the international funds transfers instructions, it is possible using other intelligence sources to identify transactions where people are purchasing bitcoins.”

Schmidt reportedly said the digital currency is interesting, but in his opinion only saw it as a commodity used to transfer value, comparing it to gold.

“But at some point, in the current world, to realise the benefits of those transactions you will want to convert them back into Australian dollars — and at that point, we have an opportunity to identify those transactions,” he said.

On the topic of bitcoin’s future independence from fiat currency, Schmidt noted that international cooperation will be key in stopping malevolent financial behavior.

Of course, that’s not to say they can track every transaction to and from bitcoin using the Australian dollars. Sites like LocalBitcoins.com allow users to make these transactions in-person and off-the-wire, so to speak.

Schmidt says Austrac cannot measure bitcoin usage in Australia, and does not see it as a threat. [via ZDNet]