Money Transfer Industry Update - Australian Dollar, WorldRemit, and Bitcoin

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Australian Dollar Reacts Positively to Employment Gains

In reaction to good news about Australia’s labor market, the country’s currency continued its upward trajectory this week, gaining .23% on both the US dollar and the British pound.  Over 54,000 Australians joined or rejoined the work force in August, well exceeding economists’ predictions.  Janu Chan, an economist at St. George Bank, views statistics like these and the accompanying rise in overall business optimism as highly encouraging:  “A continuation of this momentum would suggest a greater prospect that the Australian economy will pick up as hoped for by the RBA [Reserve Bank of Australia] .” The RBA is expected to raise interest rates in response to this growth late next year.

For Major Australian Banks, Crime Does Pay

Federal and state police investigations in Australia have uncovered proof of offshore money laundering by drug syndicates through the country’s four biggest banks:  Australia and New Zealand Banking Group Ltd. (ANZ), National Australia Bank (NAB), Commonwealth Bank of Australia (CBA), and Westpac.  CBA was nabbed by Austrac, Australia’s financial crime prevention agency, last month for its egregiously lax enforcement of AML regulations, but these latest findings shine a spotlight on a more widespread problem. 

Crime groups have been exploiting the banks’ willingness to look the other way by opening up accounts and depositing cash with insufficient or fake identification.  As a result, up to $5 million in drug money got scrubbed clean each day.  The Australian government anticipates that its recent strengthening of AML regulations and Austrac’s authority will decrease the likelihood of such activities in the future.

WorldRemit Gets a New Partner and a New American State

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London-based money transfer giant WorldRemit is growing on two fronts lately.  It just announced a new partnership with Bank of the Philippine Islands (BPI), as well as an expansion into its 48th American state:  Nevada.  WorldRemit will work with BPI, which runs 800 branch locations and 2,000 ATMS in the Philippines, to bring online and mobile remittance capabilities to its customers living abroad.  The Philippines receives more international money transfers from WorldRemit--an average of 160,000 per month--than any of the other 50 countries in which the platform operates.

By making its services available in Nevada, WorldRemit hopes to assist migrants who regularly send money home to loved ones.  Twenty percent of the approximately three million people living in Nevada are migrants, typically from Mexico and other Latin America countries.  The expansion is just one part of the company’s concerted effort to invest resources in Latino Americans and the regions from which they come.  New hires include Erick Schneider, formerly of American Express, as Head of Latin America and Adriana Vila Soto as US Head of Marketing.  Schneider described Nevada as “a richly diverse state” that is “reflective of the inclusivity that WorldRemit strives for.”

Dimon Draws Bitcoin Blood But Still Awaits Knockout Punch 

At a banking conference in New York earlier this week, Jamie Dimon, the CEO of JPMorgan Chase & Co., continued to trash talk bitcoin.  Sounding more like a reactionary politician than a measured executive, he called the cryptocurrency "a fraud" and promised to summarily fire any of his employees who traded it.  Even though he predicted huge losses for bitcoin investors, he refused to go on the record about when the crash would take place.  "It could be at $20,000 before this happens."  Since the beginning of 2014, Dimon has been issuing dramatic warnings against a bitcoin bubble, but he has yet to be proven right.  While bitcoin's value dropped by up to 4 percent after these latest insults, it is still trading at over $4,000.  

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