Australian bankers are feeling the pinch as the Bitcoin community grows ever larger in the country, and the banks are planning to spend AU$1 billion on an upgrade that will decrease processing time.

The number of merchants that are accepting Bitcoin, and of exchanges that are buying and selling virtual currencies, grows every day. The future of Bitcoin, especially as the currency relates to taxes, is still up in the air in Australia, but bankers are already seeing a potential threat, unless they improve their own services. ANZ chief Philip Chronican summed up some of the concerns that banks in Australia are currently addressing:

"There's no doubt that old-fashioned payments regimes, and there's probably nothing more old-fashioned than a cheque, just aren't up to the digital era."

Banks have certainly embraced computer technology, but they still find themselves falling far behind other paradigms, especially when traditional payment platforms such as PayPal, and virtual currency platforms such as BitPay, are able to instantly transfer huge sums. Merchants are often forced to wait for days after each sale before their funds are deposited in banks.

Currently there are four large banks and eight other financial institutions with plans to build a more efficient network for real-time payments. The new network will allow transfers to be made from both mobile devices and fixed computers. The new payments platform will be overseen by Paul Lahiff, who will begin the job as Chairman of the Steering Committee. Lahiff said that businesses would be able to get their money at the moment of purchase, instead of waiting days, or sometimes weeks:

"I think whether it's an individual customer or a small business or corporates or government, basically, people are looking for payments to be fast, easy and secure. . . . Consumers are demanding more of their financial institutions in this space and the market is developing at such a rapid rate with Apple and Google and those types of things that I think in the absence of that, the financial institutions figure they would have lost out eventually."  

Belgium-based Swift, better known as Worldwide Interbank Financial Telecommunication system, is building the new network. Swift was recently in the news after seriously considering banning Russia from using its services last summer. The Swift system is currently in use by more than 10,000 banks globally for international money transfer. The company’s chief executive, Gottfried Leibbrandt, was encouraged by the Australians’ desire to improve their current systems:

"I hope it will mean innovation, I hope it will mean new services being able to instantaneously send money to somebody else, instantaneously receive money and be offered new services that allow them to do things that are now very cumbersome, take a long time."

The Bitcoin community, and the number of accepting merchants, is still comparatively small but appears to be growing fast, especially in Australia. Bitcoin itself is still only five years old, and the “Bitcoin Boom,” when the value of the coin soared to record highs, was only two years ago.

Despite its youth, the cryptocurrency is now being accepted by large retail and service merchants worldwide, and predictions are already being made that cryptocurrencies could challenge traditional economies within another five years, certainly within the next decade. While this is certainly not the only reason for this huge investment by Australia’s financial organizations, they must be concerned that they will need to up their game if they expect to stay competitive in a rapidly growing digital world.

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