This friction has manifested in various ways. Some banks have outright refused to provide services to cryptocurrency-related businesses, while others have made it increasingly difficult for individuals to transact with cryptocurrency exchanges. Moreover, regulatory compliance and anti-money laundering (AML) concerns have often been cited as reasons for banks’ reluctance to engage with the crypto space.
The trade body advocating for government intervention in this matter argues that the crypto industry represents a legitimate and growing sector of the economy that deserves a fair and collaborative banking environment. They assert that by “forcing” banks to work with cryptocurrency-related businesses, governments can help bridge the gap between traditional finance and the crypto sector, thereby fostering innovation and economic growth.
This perspective is grounded in the recognition of the crypto industry’s potential to transform financial services. The blockchain technology that underpins cryptocurrencies offers enhanced security, transparency, and efficiency in transactions, making it a disruptive force in finance. Furthermore, decentralized finance (DeFi) platforms are enabling new financial products and services, including lending, borrowing, and yield farming, which can benefit a broad spectrum of users.
By compelling banks to work with cryptocurrency businesses, governments can potentially unlock a range of benefits. It can enhance financial inclusion, as individuals and entities involved in the crypto space gain access to traditional banking services. This, in turn, can facilitate greater regulatory oversight, enabling authorities to address concerns related to AML and consumer protection more effectively.
Additionally, collaboration between banks and crypto-related businesses can stimulate innovation and growth in both sectors. Traditional banks can leverage the strengths of blockchain technology to improve their own processes, enhance security, and lower costs. On the other hand, cryptocurrency companies can access a wider range of financial services, such as business accounts and payment processing, that are essential for their growth.
