Coinbase has accused Australia's Big Four banks of systematically denying financial services to legitimate crypto companies, calling the practice a threat to competition and trust in the country's economy.
In a submission to the House of Representatives Standing Committee on Economics, reviewed by Decrypt, the Nasdaq-listed exchange warned that "the withdrawal of banking services, commonly referred to as 'debanking', has evolved from a sporadic operational anomaly into a systemic feature of the Australian financial landscape."
"In Australia the Big 4 banks have implemented policies that impede on people's abilities to use their own money, and remove banking facilities from consumers and businesses," Coinbase wrote, referring to Commonwealth Bank, Westpac, ANZ, and National Australia Bank.
Debanking practices have "disproportionately targeted the Fintech sector and those utilising digital assets and blockchain,” the exchange said.
With four major banks controlling most transaction accounts and payment rails, Coinbase warned that account exits can amount to an “unlawful regulatory ban,” shutting lawful sectors out of the formal economy.
"In 2021, up to 60% of fintech businesses faced denial of service from banks, an issue which still needs addressing,” the exchange said.
While banks often justify closures on AML/CTF grounds, the crypto platform claimed “the opacity of these decisions has engendered a crisis of confidence in the Australian financial system amongst its everyday users.”
"There is nothing that degrades trust in an economy faster than being told you cannot use your own money,” Coinbase noted.
Decrypt has reached out to the Big Four banks for comment and will update this article should they respond.
Coinbase cited overseas models to curb financial exclusion, noting the EU guarantees a basic bank account for all legal residents and Canada allows almost anyone to open an account, even without a job or with a bankruptcy history.
The measures include requiring banks to document reasons for debanking customers, provide those reasons to affected customers, ensure debanked individuals and small businesses have access to internal dispute resolution procedures, provide a minimum of 30 days' notice before closing core banking services, and self-certify adherence to these requirements.
