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Regulators Alert Banks on Avertying Crypto

According to the co-founder of Chainalysis, large financial institutions can help reduce risks in the cryptocurrency industry. The Board of Financial Regulators warns banks not to avoid crypto players. Also, board members – the Australian Securities and Investment Commission, the Australian Prudential Regulatory Authority, the Reserve Bank, and the Treasury said; that the main issues discussed at their quarterly meeting this week were debanking and other crypto assets.

Debunking refers to the refusal to provide banking services to a specific industry. AUSTRAC wants banks to maintain cryptocurrency activity; to protect the economy from criminals who may use it to launder money from the country. The Chief Strategy Officer of Chainalysis, who founded a cryptocurrency tracking and investigation firm in 2014, agrees that banks have an essential role in crypto.

He urged banks to stay involved despite market volatility; He also suggested that falling prices won’t stop crypto’s “open source” community from creating innovative ways to deliver financial services; Just like the Linux community developed operating systems that empower many large corporations. Regulators want to regulate cryptocurrency innovations. CFR refers to stable coins, private cryptocurrencies whose value connects to Fiat currency, which is to enter the crypto economy and is in banks and digital wallets. The CFR said it considered the possibility of including payment stabilization currencies in the framework for regulating stored value objects; Supervised by APRA.

Crypto and Regulators

The announcement came a day later. The International Bank for Reconstruction and Development has pointed out that central banks are taking advantage of some of the cryptocurrency’s innovative opportunities by distributing central bank digital currencies. In parallel, the Albanian government wants to strengthen crypto regulation to improve security and transparency through greater regulation of exchanges. The board said Thursday that it agreed on the importance of a robust regulatory framework to protect investors and itself from potential financial stability risks. Mr. Levin said there was an opportunity for banks to play a more critical role in the space.

AUSTRAC, which also attended the CFR meeting last year, said anti-money laundering requirements by banks should not be used to justify an absolute ban on denial to the banking sector, such as crypto. He said this approach is dangerous because it can increase the risks of money laundering and terrorism. Also, AUSTRAC continues to be frustrated by the indiscriminate and widespread closure of accounts across the financial services sector.

The council said Thursday that its agencies were preparing advice for specific sectors on the reasons for canceling or refusing banking services. The working group discusses the issue of debunking and advises the industry as it discusses possible “policy options”. At the meeting, the participants chose how to avoid banks’ risk aversion in dealing with these sectors and ways to improve the transparency of banks’ decision-making process.

Conclusion

Chainalysis advises Commonwealth Bank on cryptocurrencies and considers clients of the US Federal Bureau of Investigation and Internal Revenue Service. Also, Mr. Levin said crypto is very similar to the software movement, especially free open source. While purists believe the crypto industry was established to deter large financial firms, the developer community makes it strong. He pointed to open source software that still exists with huge enterprise companies involved in open source projects.



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