While crypto is facing major crackdowns in some jurisdictions, the Australian government is taking the initiative to tackle the de-banking challenges faced by crypto exchanges.
In 2023, crypto has been facing severe challenges from governments and banks. Some of the largest banks have been against supporting the on-ramping and off-ramping of crypto businesses.
Treasury Discusses Recommendations
On Thursday, the Treasury released its responses for taking action on the de-banking of sectors such as financial technology, digital currency exchange, and remittance service providers.
It defines de-banking as a situation in which a bank declines to offer its services to customers due to certain risk factors. Dr. Jim Chalmers, the Treasurer of Australia, wrote:
“Taking action on de‑banking will support Australia’s technology sector to grasp opportunities by improving transparency and fairness in the banking sector.
We want to help ensure customers in emerging sectors of the economy have access to bank accounts and the services they need.”
The Council of Financial Regulators, after consulting with industry stakeholders, gave four recommendations to the government.
- Data Collection
- Transparency and Fairness measures.
- Guidance by specified banks.
- Capability uplift.
The banks should document the data about the de-banking it conducts. They should also maintain transparency and fairness and inform their clients of the reasons for de-banking. Along with that, banks should provide a 30-days notice before withdrawing their services.
Moreover, the Australian government expects banks to issue guidelines for crypto exchanges before de-banking them.
Binance Suffers De-Banking
The world’s largest crypto exchange Binance has been suffering in the Australian market. In May, it lost its banking partner and hence had to disable Australian dollar (AUD) bank transfers. Eventually, it also had to delist over eight AUD spot trading pairs.
Learn more about the banking crisis in 2023 here.