The Australian crypto industry body is fiercely criticizing recent banking restrictions imposed on cryptocurrency exchanges, arguing they stifle innovation and disproportionately affect legitimate businesses. Payments provider Cuscal, through its partner Zepto, has brought new banking restrictions on cryptocurrency exchanges in Australia, according to a statement, sparking outrage and demands for clearer regulatory frameworks.
The industry body contends that blanket restrictions are not the answer to combating scams and fraud, highlighting the need for a more nuanced and targeted approach. While acknowledging the risk of scams and frauds within the crypto industry, the trade body highlights that registered digital asset exchanges in Australia are already subject to stringent Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regulations. They argue these existing measures, if properly enforced, offer sufficient protection.
Banking executives in Australia have said that 40% of all scam profits “touch” crypto, meaning bank restrictions are “the single largest lever [banks] have to reduce this.” However, the industry body refutes this claim, stating that tracing scams through fiat currency channels remains significantly more difficult than tracing them through the blockchain. They propose increased collaboration between banks, exchanges, and law enforcement to effectively combat fraud, rather than imposing blanket bans.
In a crucial development within the Australian financial ecosystem, the Commonwealth Bank of Australia (CBA), one of the country’s most prominent banking institutions, has implemented measures impacting crypto transactions. HSBC Australia has announced it will block all payments to cryptocurrency exchanges starting J, citing customer protection against scams. Several other banks are also reportedly tightening their policies, leaving many Australian crypto users struggling to access their funds and participate in the digital asset market.
The crypto industry body is calling for urgent dialogue with banking institutions and regulators to develop a sustainable and responsible regulatory environment that fosters innovation while protecting consumers. The debate continues to intensify as the future of cryptocurrency in Australia hangs in the balance.