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Crypto Controversy: Coinbase Accuses Australian Banks of Systematic Debanking

Coinbase has raised alarms regarding the practices of Australia's Big Four banks, alleging they are unjustly denying financial services to legitimate crypto businesses.

In a recent submission to a parliamentary inquiry, the exchange characterized this "debanking" as a systemic issue that threatens competition in Australia's economy.

Coinbase claims that banks, including Commonwealth Bank, Westpac, ANZ, and National Australia Bank, are increasingly closing accounts and placing restrictions on digital asset transactions.

This critique comes amid heightened regulatory scrutiny, as Coinbase seeks to acquire an Australian Financial Services Licence.

The company argued that the banking infrastructure is stifling innovation in the fintech sector, disproportionately affecting those involved with digital assets and blockchain technology.

According to Coinbase, the four major banks dominate account access and payment processing, effectively creating an "unlawful regulatory ban" on sectors that abide by the law.

The issue is serious, with a prior report indicating that up to 60% of fintech companies encountered banking service denials in 2021.

To address the crisis of confidence engendered by these banking practices, Coinbase has called for greater transparency and accountability from banks.

They propose five measures aimed at protecting consumers, which include mandatory documentation and notification prior to account closures.

As Australia continues to reform its crypto regulations, the outcome of this situation could significantly impact the financial landscape for crypto companies operating within the country.