Amid a surge in banks limiting specific services due to scams, the Australian government is taking measures to mitigate the dangers associated with withdrawing banking services from cryptocurrency exchanges. The Treasury Department of Australia has expressed concerns that the increasing practice of banks discontinuing services for cryptocurrency businesses could have negative effects, such as reducing transparency within the industry.
The Australian Department of the Treasury issued a formal statement on June 28, discussing potential actions to tackle debanking in Australia. Debanking refers to situations where a bank refuses to offer services to customers, citing reasons such as Anti-Money Laundering (AML), compliance with sanctions, concerns over reputation, and more, as stated by the authority.
The Treasury has highlighted the absence of sufficient data regarding debanking practices in Australia, which poses a difficulty in formulating effective policy measures. The statement emphasizes the government’s recognition of the significance of comprehensive data for monitoring and shaping potential responses to debanking.
In relation to debanking, the Treasury outlined four policy responses, with a specific focus on digital currency exchanges. The authority recommended that Australia’s four major banks – Commonwealth Bank of Australia (CBA), Westpac, ANZ Group, and National Australia Bank – provide guidance that is applicable to crypto exchanges. The Treasury emphasized its encouragement for these banks to publish information regarding their requirements and risk tolerance for cryptocurrency service providers, as stated in the document.
The Treasury stated that the government anticipates banks to proactively and clearly communicate their requirements to both current and prospective customers before declining or withdrawing banking services. Furthermore, the government will collaborate closely with regulators, banks, and the affected sectors to ensure the effective and feasible implementation of the agreed-upon recommendations.
Australia’s Treasury is taking action to safeguard the domestic cryptocurrency industry following recent decisions by major banks. In early June, the largest Australian bank, CBA, announced restrictions on payments to crypto exchanges due to scam risks.
Prior to that, in mid-May, Westpac had already prohibited customers from transacting with the Binance crypto exchange. Notably, Australia is currently hosting the Blockchain Australia event, which includes a panel discussion involving executives from all “Big Four” banks. During the panel, these executives shared their justifications for discontinuing services to crypto exchanges.