Submission to Senate Committee Hearing on Australia as a Technology and Financial Centre
In its submission to the Select Committee on Australia as a Technology and Financial Centre, the Australian Bitcoin Industry Body (ABIB) highlights the challenges posed by the debanking of cryptocurrency-related businesses. ABIB outlines the risks for digital currency exchanges (DCEs), particularly the sudden termination of banking services without explanation, which can cause significant financial and reputational harm.
The submission is available to download.
FOR IMMEDIATE RELEASE
13 September 2021
Contact: Ethan Timor, CEO, Australian Bitcoin Industry Body
Email: media@bitcoinindustrybody.org.au
Website: www.bitcoinindustrybody.org.au
The Australian Bitcoin Industry Body (ABIB) has submitted a comprehensive report to the Select Committee on Australia as a Technology and Financial Centre, addressing the critical issue of debanking affecting Bitcoin-related businesses. The submission follows hearings held on 8 September 2021, where the risks posed by debanking practices to Digital Currency Exchanges (DCEs) were raised.
Key Points from the Submission:
- Debanking Risk: Bitcoin-only services and exchanges face the risk of having their banking services unilaterally terminated by Authorised Deposit-taking Institutions (ADIs) with little to no notice, leading to significant financial and reputational harm.
- Need for Transparency: The ABIB emphasizes the need for a more transparent framework that holds ADIs accountable when terminating banking relationships without providing clear reasons or avenues for appeal.
- Innovation at Risk: Current debanking practices not only stifle innovation but also force businesses offshore, harming Australia’s potential as a hub for Bitcoin-related technological advancements.
ABIB offers a set of recommendations to improve the regulatory environment for Bitcoin businesses, including:
- Recognition of Bitcoin’s Unique Risk Profile: ABIB calls for Bitcoin exchanges to be assessed separately from other cryptocurrencies due to Bitcoin’s unique risk characteristics.
- Regulatory Accountability: The introduction of clear and objective guidelines to manage the relationship between ADIs and Bitcoin-only exchanges.
- Tailored Regulation: A regulatory framework that is specific to digital assets, avoiding a one-size-fits-all approach.
- Anti-Money Laundering Measures: Implementation of fraud detection thresholds and KPIs for DCEs to ensure a balanced approach to risk management without unnecessarily penalizing compliant businesses.
ABIB’s CEO, Ethan Timor, underscores the importance of distinguishing Bitcoin from other cryptocurrencies, citing the global recognition of Bitcoin as legal tender by El Salvador and significant institutional investments.
“We believe a collaborative approach between Bitcoin businesses and the banking sector is essential to fostering innovation while ensuring a fair and transparent financial system,” said Mr. Timor.
The ABIB welcomes the opportunity for further engagement with the Committee and looks forward to contributing to Australia’s development as a leader in blockchain technology and financial services.
For media inquiries, contact:
Ethan Timor, CEO
Australian Bitcoin Industry Body
