Debanking: The New Face of Anti-competitive Behavior?
In the colorful world of banking, debanking has emerged as the boring villain in a superhero saga. As Australian Senator Andrew Bragg pointed out, banks claiming to comply with regulations may just be cloaking their anti-competitive moves in a suit of compliance. Sounds like a plot twist, right?
What is Debanking Anyway?
To throw out the jargon: debanking refers to financial institutions deciding, for reasons known only to the banking gods, to stop offering services to specific customers. This troubling behavior often raises flags—like those bright red ones you see at a bullfight—around compliance with Anti-Money Laundering and Counter-Terrorism Financing regulations. But more often than not, it serves to keep competitors at bay.
The Personal Cost of Debanking
It’s not just red tape that’s getting tangled—there are real people behind the numbers. The infamous “Bitcoin Babe,” Michaela Juric, reported having faced the wrath of 91 banks over her seven-year crypto journey, with no clear explanations or apologies. Talk about bank drama!
- No reasons given for account closures.
- Lack of case-by-case assessments.
- No recourse for affected customers.
Victories in the Debanking Arena
Despite these challenges, not everyone is going down without a fight. Trader Allan Flynn recently snagged a settlement from ANZ for his debanking ordeal. Though ANZ danced around the liability question, they offered him a chance to apply for an account again. So… redemption? Maybe. But he still has to fend off the bank with a similar case against Westpac.
Bringing Change to the Banking Landscape
During his address to the Tech Council of Australia, Senator Bragg did more than just rant. He highlighted that debanking only serves to hinder Australia’s ambition of being a global crypto hub. For a country aiming to be a leader in the crypto space, kicking out traders, miners, and investors from the banking system is like saying, ‘Hey, come join our club—oh wait, you can’t sit at our table.’
A Bright Spot: The Commonwealth Bank’s Crypto Move
On a side note, the Commonwealth Bank recently threw confetti into this banking mix by announcing it will allow customers to buy, sell, and hold crypto assets right from the CommBank app. Bragg called this a bittersweet development for banks, muddying their previously clear anti-crypto stance. Will we see a shift in practices, or is this just another case of the bank wearing two hats? Only time—and perhaps a Senate inquiry—will tell.
With a Senate committee freshly recommending procedures for businesses that have been de-banked, it seems change is on the horizon. Perhaps the banks need to consider donning a more inclusive and transparent outfit if they want to play fair and avoid the old habits of pushing the competition into the cold without a bank account.
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