The Treasury Department of Australia has expressed concerns about the increasing trend of banks reducing services to cryptocurrency companies. They warn that this could have negative consequences, such as diminishing transparency within the industry.
On June 28, the Australian Department of the Treasury released an official statement discussing potential policy measures in response to the practice of debanking in Australia. Debanking refers to when a bank refuses to offer services to a customer, often citing reasons such as concerns about Anti-Money Laundering (AML), adherence to sanctions, reputational risks, and other factors, as outlined by the authority.
The Treasury highlights the need for comprehensive data on debanking practices in Australia, making it challenging to develop effective policy responses. The statement emphasises the importance of obtaining insightful data to monitor and evaluate potential policy actions addressing debanking. The authority further states:
“The Government recognises the seriousness of de-banking and understands that inaction on the issue will stifle competition and innovation in the financial services sector and may drive businesses underground and to operate exclusively in cash.”
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The Treasury has put forth several policy responses regarding debanking, and among them, it specifically mentioned digital currency exchanges. The authority has advised the four major banks in Australia—Commonwealth Bank of Australia (CBA), Westpac, ANZ Group, and National Australia Bank—to issue guidance applicable to crypto exchanges.
The Treasury has encouraged banks to disclose information regarding their requirements and risk tolerance about crypto service providers. The document states, “The Government expects banks to clearly and proactively communicate their requirements to existing and potential customers before denying or withdrawing banking services.” The state will collaborate closely with regulators, banks, and the affected sectors to effectively implement the agreed-upon recommendations.
Australia’s Treasury has taken action to safeguard the local crypto industry, particularly following CBA’s announcement in early June that it would restrict certain payments to crypto exchanges due to scam risks. Previously, Westpac had also prohibited customers from transacting with the Binance crypto exchange in mid-May.
Notably, Australia is currently hosting a significant blockchain and cryptocurrency event known as Blockchain Australia. During the conference on June 26, a panel comprising executives from the “Big Four” banks in Australia provided their rationale for discontinuing services to crypto exchanges. Sophie Gilder, CBA’s Managing Director of Blockchain and Digital Assets, highlighted the impact of scams on customers, stating, “One in three dollars scammed from Australians touch crypto—one in three. So it’s the single largest lever that we have to reduce this impact on our customers.”