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The crypto industry’s inability to access banking services still concerns many industry observers despite recent policy victories.
In past years, financial services firms and banks concerned about fiduciary risk, reporting liabilities and reputational risk often would refuse to offer service to crypto firms — i.e., “debanking” them.
Legislative efforts in the United States and Australia are attempting to remove these barriers for the crypto industry. In the former, legislators repealed guidelines that made it difficult for banks to custody crypto assets, as well as those stating that crypto carried “reputational risk” for banks. In the latter, the Labor Party has introduced a bill to create a legal framework for crypto, giving banks the clarity they need to interact with the crypto industry.
Despite these tangible efforts, some crypto industry observers say that the crypto’s debanking problem is far from over.
US crypto execs say debanking is still an issue
The crypto industry has long decried “Operation Chokepoint 2.0,” its nickname for a suite of policies that they claim constrained the crypto industry from growing under the administration of former President Joe Biden. Among these were measures making it more difficult for crypto firms to access banking services.
The early days of the second administration of President Donald Trump have seen many of these repealed or changed. One of the first was the repeal of Staff Accounting Bulletin 121, which required banks offering custody for customers’ cryptocurrencies to list them as liabilities on their balance sheets — this made it very difficult for banks to justify offering such services.
The administration also appointed a new head of the Office of the Comptroller of the Currency (OCC), Rodney Hood. Dennis Porter, CEO of the Bitcoin-focused policy organization Satoshi Action, told Cointelegraph that under Hood’s tenure, the OCC has already said banks can offer crypto-related services like custody, stablecoin reserves and blockchain participation.
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“This opens the door for broader adoption of digital asset technology and custodial services by traditional financial institutions, signaling a major shift in how banks engage with crypto,” he said.
Despite these victories, Caitlin Long, founder and CEO of Custodia Bank, said on March 21 that debanking is likely to remain a problem for crypto firms into 2026.
Long said the non-partisan board of governors of the Federal Reserve is “still controlled by Democrats,” alluding to Democrats’ more skeptical stance on crypto. Long claimed that “there are two crypto-friendly banks under examination by the Fed right now, and an army of examiners was sent into these banks, including the examiners from Washington, a literal army just smothering the banks.”
Long noted that Trump won’t be able to appoint a new Fed governor until January, meaning that, while other agencies may be more crypto-friendly, there are still roadblocks.
Australia’s Labor Party to create crypto framework
Stand With Crypto, the “grassroots” crypto advocacy organization started by Coinbase that has spread to the US, UK, Canada and Australia, said that “in Australia, debanking is quietly shutting out innovators and entrepreneurs — particularly in the crypto and blockchain space.”
In a post on X, the organization claimed that debanking results in “reputational damage, loss of revenue, increased operational costs, and inability to launch or sustain services.” It also claimed that it forces some companies to move offshore.
In response to these concerns, the ruling center-left Labor Party in Australia has proposed a new set of laws for the cryptocurrency industry. The changes to current financial services law seek to tackle the issue of debanking in the country’s cryptocurrency industry.
Australia’s Treasury says its new crypto regulations have four priorities. Source: Australian Department of the Treasury
Edward Carroll, head of global markets and corporate finance at MHC Digital Group — an Australian crypto platform — told Cointelegraph that in Australia, debanking decisions were “not the result of regulatory directives.”
“Rather, they appear to stem from a more general sense of risk aversion due to the current lack of a clear regulatory framework.”
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Carroll was optimistic about the Labor Party’s proactive stance. The major political parties were “showing a shift in sentiment and a shared commitment to establishing formal crypto regulation.”
“We are hopeful that this will give banks the confidence to reengage with crypto businesses that meet compliance standards,” he said.
Canada unlikely to relieve crypto firms
In Canada, “debanking remains a serious and ongoing challenge for the Canadian crypto industry,” according to Morva Rohani, executive director of the Canadian Web3 Council.
“While some firms have successfully established relationships with banking partners, many continue to face account closures or denials with little explanation or recourse,” she told Cointelegraph.
While debanking actions aren’t explicit, financial institutions’ interpretation of Anti-Money Laundering and Know Your Customer regulations “creates a risk-averse environment where banks weigh compliance and reputational concerns against the relatively low revenue potential of crypto clients.”
The end result, per Rohani, is a systemic debanking problem for the digital assets industry.
But unlike in the US and Australia, the Canadian crypto industry may not find relief anytime soon. Prime Minister Mark Carney, whose more crypto-skeptic Liberal Party is surging in the polls ahead of the April 28 snap elections, is himself a crypto-skeptic.
Polls show Carney firmly in the lead. Source: Ipsos
Carney has stated that the future of money lies more in a “central bank stablecoin,” otherwise referred to as a central bank digital currency.
Rohani said that “no comprehensive legislative solution has been implemented” with regard to debanking. “A more structured approach, including mandated disclosure of reasons for account termination and regulatory oversight, is needed,” she said.
Critics claim crypto is “hijacking” the debanking issue
There is another side to the debanking debate, which claims that crypto’s debanking “problem” is a non-issue or a vehicle for crypto firms to get what they want in terms of regulation.
Molly White, the author of Web3 Is Going Just Great and the “Citation Needed” newsletter, has noted that, in the US at least, crypto firms have claimed to be victims of debanking while lauding Trump’s efforts to end protections for debanking at the same time.
In a Feb. 14 post, White stated that the crypto industry had “hijacked” the discussion around debanking, which contains legitimate concerns regarding access to financial services — particularly regarding discrimination due to race, religious identity or industry affiliation.
She claims the crypto industry has used debanking as a means to deflect legitimate regulatory inquiries into crypto companies’ compliance efforts.
Further of note is the fact that Coinbase CEO Brian Armstrong has applauded the efforts of the Department of Government Efficiency (DOGE), with Elon Musk at the helm, to dismantle the Consumer Financial Protection Bureau (CFPB).
One of the CFPB’s responsibilities is to investigate claims of debanking. But when DOGE instructed the agency to halt all work, Armstrong said it was “100% the right call,” in addition to making dubious claims about the agency’s constitutionality.
In the meantime
Whether the industry’s debanking concerns stem from legitimate discrimination or an attempt at regulatory capture, crypto firms are developing solutions in the interim.
Porter said that, as an alternative to banking services, “many crypto companies have leaned on stablecoins as a primary tool for managing finances,” while others have worked with “smaller regional banks or specialized trust companies open to digital assets.”
Rohani said that this kind of “patchwork of relationships” can increase operational costs and risks and are “not sustainable long-term solutions for growth or to build a competitive, regulated industry.”
Porter concluded that the banking workarounds could actually strengthen the industry’s position, stating that they may “continue evolving into fully integrated relationships with traditional financial institutions, further cementing crypto’s place in mainstream finance.”
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Only 20 of the 181 Bitcoin service providers registered with El Salvador’s central bank are operational, with the rest failing to meet the country’s requirements under its Bitcoin Law.
Local media outlet El Mundo cited data from the Central Reserve Bank of El Salvador, showing that 11% of the service providers are operational. According to the central bank’s database, the rest of the providers are classified as non-operational.
The data showed that at least 22 non-operational providers have failed to meet most of the country’s Bitcoin Law requirements, which mandate that providers implement stringent supervision of their financial systems.
Most of El Salvador’s Bitcoin service providers are non-operational
El Salvador’s Bitcoin Law requires providers to maintain an Anti-Money Laundering (AML) program, keep records that accurately reflect the company’s assets, liabilities and equity and have a tailored cybersecurity program depending on the nature of its services.
The data showed that 89% of the registered providers have failed to meet some of these obligations to be classified as operational.
Still, a few firms have satisfied the legal criteria, including the state-backed Chivo Wallet and companies including Crypto Trading & Investment and Fintech Américas.
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El Salvador’s Bitcoin experiment
In 2021, El Salvador became the first country to accept Bitcoin as legal tender along with the US dollar. This move made Bitcoin integral to El Salvador President Nayib Bukele’s economic strategy.
However, the Central American country recently signed a deal with the International Monetary Fund (IMF) on a $1.4 billion loan in exchange for rolling back some of its Bitcoin-related efforts. Under the agreement, taxes will be paid in US dollars and public institutions will limit their use of Bitcoin.
On March 3, the IMF asked the country to stop its public sector Bitcoin buys. Still, Bukele said the government will continue to purchase Bitcoin, seemingly contradicting its IMF deal.
The IMF deal prompted speculation about whether the country would rescind Bitcoin’s status as legal tender. John Dennehy, an El Salvador-based Bitcoin activist and educator, said in an X Space with Cointelegraph that a rollback law changing Bitcoin’s legal status is set to take effect on April 30.
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Tech giant Meta has been given the green light from the European Union’s data regulator to train its artificial intelligence models using publicly shared content across its social media platforms.
Posts and comments from adult users across Meta’s stable of platforms, including Facebook, Instagram, WhatsApp and Messenger, along with questions and queries to the company’s AI assistant, will now be used to improve its AI models, Meta said in an April 14 blog post.
The company said it’s “important for our generative AI models to be trained on a variety of data so they can understand the incredible and diverse nuances and complexities that make up European communities.”
Meta has a green light from data regulators in the EU to train its AI models using publicly shared content on social media. Source: Meta
“That means everything from dialects and colloquialisms, to hyper-local knowledge and the distinct ways different countries use humor and sarcasm on our products,” it added.
However, people’s private messages with friends, family and public data from EU account holders under the age of 18 are still off limits, according to Meta.
People can also opt out of having their data used for AI training through a form that Meta says will be sent in-app, via email and “easy to find, read, and use.”
EU regulators paused tech firms’ AI training plans
Last July, Meta delayed training its AI using public content across its platforms after privacy advocacy group None of Your Business filed complaints in 11 European countries, which saw the Irish Data Protection Commission (IDPC) request a rollout pause until a review was conducted.
The complaints claimed Meta’s privacy policy changes would have allowed the company to use years of personal posts, private images, and online tracking data to train its AI products.
Meta says it has now received permission from the EU’s data protection regulator, the European Data Protection Commission, that its AI training approach meets legal obligations, and the company continues to engage “constructively with the IDPC.”
“This is how we have been training our generative AI models for other regions since launch,” Meta said.
“We’re following the example set by others, including Google and OpenAI, both of which have already used data from European users to train their AI models.”
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An Irish data regulator opened a cross-border investigation into Google Ireland Limited last September to determine whether the tech giant followed EU data protection laws while developing its AI models.
X faced similar scrutiny and agreed to stop using personal data from users in the EU and European Economic Area last September. Previously, X used this data to train its artificial intelligence chatbot Grok.
The EU launched its AI Act in August 2024, establishing a legal framework for the technology that included data quality, security and privacy provisions.
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