Australian Treasury Takes Action On Crypto De-Banking Crisis

Key Points:

• Australian Treasury recognizes the need to address de-banking for crypto platforms.
• Government supports most of the Council of Financial Regulators’ guidance on de-banking.
• Binance Australia’s de-banking affects 1 million consumers; major banks urged to manage de-banking concerns.

The Australian Treasury said on Wednesday that it recognizes the importance of de-banking corporations. The Treasury also said that it knows that further delay will drive businesses underground. The action follows reports of banking partners disconnecting from crypto platforms in the nation.

In the same declaration, it backed up the bulk of prior Council of Financial Regulators (CFR) guidance on de-banking, which might harm crypto-related firms. Last year, the CFR made four suggestions to the government on potential de-banking legislative steps.

The government’s move to explain its position on de-banking comes only hours after Blockchain Australia repeated its vow to eliminate fraud. Moreover, the development came after claims that Binance Australia had just 24 hours’ warning before de-banking. Binance Australia has ceased accepting AUD payments and withdrawals through bank transfers.

Debanking is a severe problem. Binance’s de-banking harmed around 1 million Australian consumers. Without a doubt, the unexpected departure from the banking system has posed challenges for the crypto exchange. Users were reassured that the loss of their banking partner had not had a substantial impact on their business operations.

Recently, the Commonwealth Bank of Australia (CBA) imposed partial restrictions citing scams and the amount of money lost by customers, and Binance Australia halted Australian dollar (AUD) deposits and withdrawals via bank transfer due to a decision made by a third-party payment service provider.

To solve this, the government has approved a suggestion that the country’s four main banks (Commonwealth Bank, National Australia Bank, ANZ Bank, and Westpac) align with policies to successfully manage de-banking concerns.

This development highlights the growing acceptance of cryptocurrency’s position in the financial ecosystem, as well as the need for strong regulatory measures to enable its smooth integration.

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