Bitcoin is the most popular cryptocurrency of all times. Since its inception, the use of Bitcoin has skyrocketed, and people from all corners of the world now utilize it for trading and making transactions. However, the adoption lacks uniformity and then there are various regulations and dependencies that make it hard for Bitcoin-related businesses to sustain themselves. A New Zealand based cryptocurrency portal has become the prime example of such challenges faced by digital currency businesses.
BitNZ, a one-time leading Bitcoin exchange in New Zealand now has a banner on the website announcing its imminent shutdown. The message on bitNZ reads,
“bitNZ will be closing down on April 15, 2017; please withdraw all funds before then.”
The platform has provided the reason behind its decision to shut down on Reddit. A three-day-old post on the social platform states the unwillingness of country’s banks to extend their services to the platform.
“Due to the refusal of NZ banks to allow bank accounts for the purpose of trading bitcoins it is impossible for us to continue operations.”
The platform has been operational since 2011, and in the span of 6 years, it has processed over 11000 bank transactions. It has also left a trail of happy customers, who are impressed by bitNZ’s efficiency.
It is not the first time bitNZ is facing a problem with the country’s banking sector. Last year, the platform faced a similar situation which prevented it from accepting fiat deposits. Eventually, the problem was resolved. But this time, it doesn’t seem to be happening.
BitNZ is not the only platform to encounter such issues. Recently the leading Venezuelan cryptocurrency exchange, SurBitcoin announced the suspension of its services after its banking partner, Banesco Bank decided to withdraw its banking service. Even last year, SurBitcoin was forced to suspend fiat deposits after its accounts were frozen for few days pending investigation.
The dependency of Bitcoin exchanges on conventional banking services has created a cloud of uncertainty over them. The banks can decide to withdraw support anytime, forcing the cryptocurrency platforms out of business. The problem will persist until decentralized exchange platforms become a norm, as they will not dependent on centralized infrastructure like banks to enable cryptocurrency-fiat transactions.