Crypto debanking could drive industry underground: Australian Treasury

The Treasury Department of Australia Warns Against Debanking

The Treasury Department of Australia has warned that the increasing practice of banks discontinuing services to cryptocurrency firms could result in undesirable outcomes such as reducing the sector’s transparency.

On June 28th, the Australian Department of the Treasury released an official declaration discussing potential policy solutions to debanking in Australia. Debanking is a situation in which a bank denies services to a customer due to Anti-Money Laundering (AML) compliance, sanctions compliance, reputation risk considerations, and other reasons, the agency noted.

The Treasury has stated that the lack of data on debanking practices in Australia makes it difficult to create successful policy solutions. “The Government understands the need for reliable data to evaluate any policy initiatives related to de-banking,” the statement reads. Furthermore, the authority remarked:

The Treasury issued four policy responses on debanking, particularly advising Australia’s four major banks – CBA, Westpac, ANZ Group, and National Australia Bank – to provide guidance pertinent to digital currency exchanges.

The Treasury emphasized that it has encouraged the banks to make public the data related to their needs and risk tolerance regarding providers of crypto services, according to the document.

The Treasury stated that the Government expects banks to be transparent and proactive in informing both current and prospective customers of their requirements before refusing or discontinuing banking services. Additionally, the state will collaborate with regulators, banks, and the impacted industries to make sure that the accepted suggestions are implemented efficiently and realistically.

The Four Major Banks in Australia Provide Guidance on Crypto Services

The executive of Binance Australia stated that they received a 12-hour notice prior to being debanked.

Australia’s Treasury is taking steps to safeguard the nation’s crypto sector in the wake of Commonwealth Bank (the largest bank in Australia) announcing in early June that it would be blocking certain payments to crypto exchanges due to the potential for fraud. Prior to this, Westpac had already prohibited its customers from making transactions with the Binance crypto exchange in mid-May.

Australia is presently hosting a significant blockchain and digital currency event called Blockchain Australia. On June 26, the conference had a panel including executives from the four biggest banks in Australia, with the executives giving their justification for ending services to crypto exchanges.

“One third of the money that is stolen from Australians involves cryptocurrency – one third. Therefore, this is the most powerful tool we have to reduce the harm done to our clients,” said Sophie Gilder, CBA’s Managing Director of Blockchain and Digital Assets.

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