Crypto's Debanking Problem Persists Despite New Regulations

The crypto industry faces ongoing challenges in accessing banking services despite legislative efforts in the US and Australia aimed at easing restrictions. Concerns over fiduciary, reporting, and reputational risks have led to "debanking" of crypto firms, prompting legislative actions to provide clarity and remove barriers. US measures include repealing guidelines that made it difficult for banks to custody crypto assets, while Australia proposes a legal framework to give banks confidence in engaging with the crypto industry. However, some experts believe debanking will persist due to continued skepticism within certain regulatory bodies like the Federal Reserve. Australia's Labor Party is addressing debanking concerns with new crypto laws, hoping to encourage banks to re-engage with compliant crypto businesses. Canada's crypto industry faces similar issues, with a crypto-skeptic leader potentially hindering legislative relief. Critics argue that crypto firms are misusing the debanking issue to deflect regulatory scrutiny and gain advantages. Crypto companies are exploring alternative solutions like stablecoins and relationships with smaller banks, but these are considered unsustainable long-term. Some believe these workarounds may lead to more integrated relationships with traditional financial institutions.