Connect with us

Published

on

Crypto’s debanking problem persists despite new regulations

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 In the former, legislators repealed guidelines that made it difficult for banks to custody crypto assets, as well as those stating that crypto carried “reputational risk” for banks.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. 

Crypto’s debanking problem persists despite new regulations

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The early days of the second administration of President Donald Trump have seen many of these repealed or changed.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.

Related: Atkins becomes next SEC chair: What’s next for the crypto industry

“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.

Crypto’s debanking problem persists despite new regulations

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.”

Related: US gov’t actions give clue about upcoming crypto regulation

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.

Crypto’s debanking problem persists despite new regulations

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. 

Crypto’s debanking problem persists despite new regulations

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.”

Magazine: UK’s Orwellian AI murder prediction system, will AI take your job? AI Eye

Continue Reading

Politics

Can PM turn diplomatic work with Macron into concrete action on migration?

Published

on

By

Can PM turn diplomatic work with Macron into concrete action on migration?

Emmanuel Macron addressing parliament in the Palace of Westminster’s Royal Gallery was a highly anticipated moment in the long history of our two nations.

That story – the conflict and a historic Anglo-French agreement that ended centuries of feuding, the Entente Cordiale – adorn the walls of this great hall.

Looming over the hundreds of MPs and peers who had gathered in the heat to hear the French president speak, hang two monumental paintings depicting British victories in the Napoleonic wars, while the glass stand in the room commemorates the 408 Lords who lost their lives fighting for Europe in two world wars.

Politics latest: UK and France will get ‘tangible results’ on migration

The French president came to parliament as the first European leader to be honoured with a state visit since Brexit.

It was the first address of a French president to parliament since 2008, and Mr Macron used it to mark what he called a new era in Anglo-Franco relations.

Please use Chrome browser for a more accessible video player

Sky News’ political correspondent Tamara Cohen was watching Emmanuel Macron’s speech. She highlights the president saying he wants to see tangible results on migration.


Peers and MPs cheered with delight when he confirmed France would loan the Bayeux Tapestry to the UK in the run-up to the anniversary of William the Conqueror’s birthday.

“I have to say, it took properly more years to deliver that project than all the Brexit texts,” he joked as former prime minister Theresa May watched on from the front row

From Brexit to migration, European security, to a two-state solution and the recognition of Palestine, Mr Macron did not shy away from thorny issues, as he turned the page on Brexit tensions woven through Anglo-French relations in recent years, in what one peer described to me as a “very political speech rather than just the usual warm words”.

Macron addressing Parliament
Image:
Emmanuel Macron addresses parliament

He also used this address to praise Sir Keir Starmer, sitting in the audience, for his leadership on security and Ukraine, and his commitment to the international order and alliances forged from the ashes of the Second World War. For that, he received a loud ovation from the gathered parliamentarians.

Please use Chrome browser for a more accessible video player

Macron’s first-ever state visit: personal or political?

Read more:
Thatcher loyalist Norman Tebitt dies aged 94
Public finances in ‘relatively vulnerable position’

The test now for Sir Keir is whether he can turn his deft diplomatic work in recent months with Mr Macron into concrete action to give him a much-needed win on the domestic front, particularly after his torrid week on welfare.

The government hopes that France’s aim for “cooperation and tangible results” at the upcoming political summit as part of this state visit, will give Starmer a much-needed boost.

The PM is attempting to drive-down crossings by negotiating a one-in one-out return treaty with France.

Under this plan, those crossing the Channel illegally will be sent back to France in exchange for Britain taking in an asylum seeker with a family connection in the UK.

But as I understand it, the deal is still in the balance, with some EU countries unhappy about France and the UK agreeing on a bilateral deal.

Continue Reading

Politics

UK and France have ‘shared responsibility’ to tackle illegal migration, Emmanuel Macron says

Published

on

By

UK and France have 'shared responsibility' to tackle illegal migration, Emmanuel Macron says

Emmanuel Macron has said the UK and France have a “shared responsibility” to tackle the “burden” of illegal migration, as he urged co-operation between London and Paris ahead of a crunch summit later this week.

Addressing parliament in the Palace of Westminster on Tuesday, the French president said the UK-France summit would bring “cooperation and tangible results” regarding the small boats crisis in the Channel.

Politics latest: Lord Norman Tebbit dies, aged 94

Mr Macron – who is the first European leader to make a state visit to the UK since Brexit – told the audience that while migrants’ “hope for a better life elsewhere is legitimate”, “we cannot allow our countries’ rules for taking in people to be flouted and criminal networks to cynically exploit the hopes of so many individuals with so little respect for human life”.

“France and the UK have a shared responsibility to address irregular migration with humanity, solidarity and fairness,” he added.

Looking ahead to the UK-France summit on Thursday, he promised the “best ever co-operation” between France and the UK “to fix today what is a burden for our two countries”.

Sir Keir Starmer will hope to reach a deal with his French counterpart on a “one in, one out” migrant returns deal at the key summit on Thursday.

King Charles also addressed the France-UK summit at the state banquet in Windsor Castle on Tuesday evening, saying it would “deepen our alliance and broaden our partnerships still further”.

King Charles speaking at state banquet welcoming Macron.
Image:
King Charles speaking at state banquet welcoming Macron.

Sitting next to President Macron, the monarch said: “Our armed forces will cooperate even more closely across the world, including to support Ukraine as we join together in leading a coalition of the willing in defence of liberty and freedom from oppression. In other words, in defence of our shared values.”

In April, British officials confirmed a pilot scheme was being considered to deport migrants who cross the English Channel in exchange for the UK accepting asylum seekers in France with legitimate claims.

The two countries have engaged in talks about a one-for-one swap, enabling undocumented asylum seekers who have reached the UK by small boat to be returned to France.

👉Listen to Politics at Sam and Anne’s on your podcast app👈       

Britain would then receive migrants from France who would have a right to be in the UK, like those who already have family settled here.

The small boats crisis is a pressing issue for the prime minister, given that more than 20,000 migrants crossed the English Channel to the UK in the first six months of this year – a rise of almost 50% on the number crossing in 2024.

France's President Emmanuel Macron speaks at the Palace of Westminster during a state visit to the UK
Image:
President Macron greets Commons Speaker Sir Lindsay Hoyle at his address to parliament in Westminster.

Elsewhere in his speech, the French president addressed Brexit, and said the UK could not “stay on the sidelines” despite its departure from the European Union.

He said European countries had to break away from economic dependence on the US and China.

Read more:
French police forced to watch on as migrants attempt crossing
Public finances in ‘relatively vulnerable position’, OBR warns

“Our two countries are among the oldest sovereign nations in Europe, and sovereignty means a lot to both of us, and everything I referred to was about sovereignty, deciding for ourselves, choosing our technologies, our economy, deciding our diplomacy, and deciding the content we want to share and the ideas we want to share, and the controversies we want to share.

“Even though it is not part of the European Union, the United Kingdom cannot stay on the sidelines because defence and security, competitiveness, democracy – the very core of our identity – are connected across Europe as a continent.”

Continue Reading

Politics

UN criticises Starmer’s welfare reforms and warns measures will ‘increase poverty rates’

Published

on

By

UN criticises Starmer's welfare reforms and warns measures will 'increase poverty rates'

A UN committee on disability rights has criticised the UK government’s welfare reforms, saying they will “increase poverty rates”. 

In an intervention likely to be seized on by MPs seeking to further water down the measures, the committee asks ministers for answers on 10 issues surrounding the benefit changes – and says the reforms risk “regression” for disabled people.

The committee, which reports to the Office of the High Commissioner for Human Rights, asks about British politicians suggesting people are defrauding the benefits system.

Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer at the launch of the 10-year health plan in east London. Pic: PA
Image:
Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer at the launch of the 10-year health plan in east London. Pic: PA

One point on which it wants clarification is: “Public statements by politicians and authorities portraying persons with disabilities as making profit of social benefits, making false statements to get social and disability benefits or being a burden to society.”

Other questions are on the impact the measures will have on “young persons, new claimants of disability benefits, women with disabilities, persons with disabilities with high level supports” and others.

They ask ministers about what measures they have taken to address “the foreseeable risk of increasing poverty rates amongst persons with disabilities if cuts are approved” and claim the welfare bill has had “limited scrutiny”.

The letter claims that the committee has “received credible information” that the Universal Credit and Personal Independent Payment Bill “will deepen the signs of regression” that the committee warned about in a report last year on the cost of living crisis and its impact on disabled people.

More on Labour

An intervention by the UN will be an embarrassment to the government, which has promised its welfare reforms will help disabled people into work.

Please use Chrome browser for a more accessible video player

Welfare bill blows ‘black hole’ in chancellor’s accounts

Liz Kendall, the welfare secretary, was criticised heavily earlier in the year for saying some people on benefits were “taking the mickey”.

After a chaotic first vote in Parliament on 1 July, in which MPs succeeded in watering down the reforms significantly, the government now says its reforms will lift 50,000 people out of poverty. The bill was backed by 335 MPs, with 260 against – a majority of 75.

Read more:
This has been PM’s most damaging U-turn yet
Is Starmer at the mercy of his MPs?

The first version of the reforms would have – the government’s assessment said – pushed 250,000 people into poverty.

Charities are urging MPs to continue to push for further changes – including on cuts to Universal Credit sickness payments.

Please use Chrome browser for a more accessible video player

Labour welfare rebel wants ‘respect’

A different UN committee heavily criticised benefit changes made by the Conservatives in 2016 and called on the UK to take “corrective measures” when Labour came into office.

The UN’s committee on Economic, Social and Cultural Rights (CESCR) concluded that “welfare reform” measures introduced by Conservative-led governments in 2012 and 2016 had disproportionately affected disabled people, low-income families, and workers in “precarious employment”.

The committee said this had led to “severe economic hardship, increased reliance on food banks, homelessness, negative impacts on mental health, and the stigmatisation of benefit claimants”.

The Department for Work and Pensions has been contacted for comment.

The Universal Credit and Personal Independent Payment Bill returns to the Commons on Wednesday for its remaining stages.

Mikey Erhardt, policy lead at Disability Rights UK, said: “The fact that the UN has yet again felt it needs to write to the UK government about our cruel and punitive social security system should be a national shame.

“We hope this letter is a wake-up call for MPs. Despite all the chaos of the last-minute climbdowns and concessions, the Universal Credit bill remains broken.

“There are still billions of cuts on the table, and we urge MPs to approach tomorrow’s proceedings with caution as their vote will have serious implications for disabled people across the country.

“If disabled people feel unable to trust the government’s promises on co-production and the UN needed to raise concerns over the bill’s impact, how can MPs vote this bill through?”

Continue Reading

Trending