- Debanking by major banks risks stifling competition and trust in Australia crypto economy.
- Payment rail dominance lets big banks block fintechs without clear rules or appeal paths.
- Licensing reforms need banking access safeguards to keep compliant digital firms operating.
Australia’s largest banks face fresh scrutiny after Coinbase accused them of systematically cutting off financial access for crypto and fintech companies. The exchange told lawmakers that debanking has shifted from an isolated issue into a structural problem.
Consequently, Coinbase warned that competition, innovation, and public trust now face serious risks. The submission arrived amid a federal inquiry into digital payments, highlighting rising tension between traditional banks and digital asset firms. Moreover, Coinbase argued that restricted access undermines lawful businesses operating under Australia’s financial rules.
The exchange said the issue affects not only companies but also everyday users. Significantly, it warned that customers lose control over their own funds.
Hence, Coinbase framed debanking as a threat to economic fairness and transparency. The firm also stressed that banking access forms the backbone of modern commerce. Without it, entire sectors struggle to operate within the formal economy.
Banks Control Access to Core Payment Rails
Coinbase pointed to the dominance of Australia’s four largest banks. These include Commonwealth Bank, Westpac, ANZ, and National Australia Bank. Together, they control most transaction accounts and payment systems. Consequently, account closures can quickly block firms from operating at scale.
Besides outright closures, Coinbase said banks increasingly restrict transfers linked to digital assets. These limits slow payments and disrupt daily operations.
Moreover, the exchange warned that such actions resemble regulatory bans. However, banks impose these restrictions without clear explanations or appeal processes. This lack of clarity, Coinbase said, fuels distrust across the financial system.
Fintech Sector Feels Disproportionate Impact
Coinbase highlighted data showing fintech firms face higher risks than other industries. In 2021, more than half of Australian fintech companies reported banking service denials.
Additionally, the exchange said the problem persists despite years of policy discussions. Hence, innovation-driven firms struggle to compete with established players.
Banks often cite financial crime concerns to justify restrictions. However, Coinbase argued that vague risk assessments harm compliant businesses.
Moreover, it said transparency remains limited even for regulated firms. This environment, Coinbase warned, discourages investment and slows technology adoption.
Regulatory Shift Raises Stakes
The dispute comes as Australia moves toward tighter crypto oversight. Coinbase now seeks an Australian Financial Services Licence from the Australian Securities and Investments Commission. Consequently, the company urged lawmakers to align licensing reforms with banking access protections.
Additionally, Treasury officials previously acknowledged debanking concerns. They said consultations with banks continue. However, Coinbase urged faster action. It argued that fair access to banking underpins confidence in Australia’s financial future.
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