Australian Treasury has presented a project to combat de-banking of crypto firms

What’s new? The Australian authorities, drawing on the experience of the European Union and Singapore, intend to create a comprehensive regulatory framework for cryptocurrencies in order to integrate them into the country’s economy. According to a statement from the Treasury, the government will use tokenization, real world assets (RWAs), and central bank digital currencies (CBDCs) as part of a broader plan to modernize the financial system.

Project documentation

What else is known? According to the project text (white paper), the Treasury, the Securities and Investment Commission (ASIC), and the Reserve Bank plan to launch pilot trials using tokenized money, including stablecoins, to settle transactions in wholesale markets.

While the government has ruled out launching a retail national cryptocurrency for now, it sees a wholesale version of CBDC and tokenized settlement infrastructure as key to making the market more efficient.

Australia’s Central Bank did not see any advantages in the introduction of retail CBDC

The regulator will focus on developing and launching a wholesale version of the digital national currency

Read more

“Markets for tokenized assets may be able to increase automation, reduce settlement risk, lessen reliance on multiple financial intermediaries, simplify trading processes, reduce transaction costs, and provide broader access to traditionally illiquid assets,” the report reads.

It also outlines the licensing structure for crypto exchanges, which in Australia will be known as digital asset platforms (DAPs).

DAP operators will be required to comply with financial services obligations, such as capital and disclosure requirements, and to use third-party custodians to hold customer assets.

With the new DAP licensing regime, the authorities intend to address the problem of cryptocurrencies’ access to banking services. In particular, it will improve risk management for financial institutions.

These efforts to combat the de-banking of crypto firms in Australia come amid ongoing hearings in the United States on the topic. For example, Senator Tim Scott introduced a bill by the FIRM designed to prevent regulators from using “reputational risk” to block access by crypto companies to banking services.

Back in May 2023, Australian banks began blocking transfers to crypto exchanges due to the risk of fraud. Westpac was the first to do so, noting that investment scams account for about half of all fraud losses, with a third of fraud-related transfers going to crypto exchanges.

National Australia Bank (NAB) and Commonwealth Bank of Australia (CBA) followed suit. HSBC Bank Australia was the last major bank in the country to stop processing such transactions in July 2024.