Banks' Crypto Caps Spark Exodus and Frustration in Australia

Australians continue to experience friction in accessing banking services for cryptocurrency transactions, despite the country's long-standing regulatory progress in the digital asset space. According to a Binance survey of 1,900 Australians, 58% of respondents expressed a desire for unrestricted deposits into crypto exchanges, while 22% had switched banks to ease their crypto activities. Executives from major crypto exchanges, including Binance and OKX, highlight that these banking barriers hinder broader adoption, consumer confidence, and financial inclusion.

The challenges stem from traditional banks restricting or limiting transactions related to crypto. For example, Commonwealth Bank, one of Australia’s largest banks, imposed a $10,000 monthly cap on transfers to crypto exchanges. OKX Australia’s CEO, Kate Cooper, noted that such restrictions create frustration among users, even as the country already has a 30% crypto adoption rate. This friction has pushed some users to seek alternative banking solutions, often with mixed success.

Debanking, or the sudden closure of accounts by financial institutions, remains a significant issue for both individual crypto users and businesses. Jonathon Miller of Kraken reported that many of his clients and employees have faced account closures due to their involvement in the crypto sector. This practice, reminiscent of the U.S. Operation Chokepoint, introduces instability for crypto businesses and increases reliance on a limited number of banks willing to support the industry. Binance’s Matt Poblocki emphasized that these roadblocks are not isolated to one exchange but reflect systemic issues across the sector.

In response to these challenges, industry leaders are calling for clearer, more comprehensive legislation to distinguish between legitimate crypto businesses and bad actors. Cooper pointed to the importance of legislation in giving banks the confidence to work with regulated crypto entities. Australia’s Treasury has outlined four key priorities for its new crypto regulatory framework, focusing on anti-money laundering, consumer protection, and market integrity. Meanwhile, the government under the Labor Party has proposed a framework aimed at addressing debanking and improving regulatory clarity.

Recent developments also include crypto exchanges expanding their services into retirement savings systems. On Tuesday, Coinbase and OKX launched services for Australian self-managed superannuation funds (SMSFs), a move that could significantly broaden the adoption of crypto among older Australians. Despite this, reported crypto holdings in SMSFs fell by approximately 4% year-on-year in 2025, according to the Australian Taxation Office (ATO). This decline occurred even as Bitcoin prices rose by 60% during the same period.

Younger Australians, however, continue to show strong interest in crypto. Data from Independent Reserve indicates that 53% of Australians aged 25–34 own crypto, making them the most active demographic. As this group approaches retirement, SMSF adoption rates for crypto could rebound. Additionally, the broader global trend shows growing acceptance of crypto in retirement planning, with initiatives in the U.S. and U.K. also exploring ways to integrate digital assets into pension schemes.

Industry participants remain cautiously optimistic. While regulatory clarity is seen as a key factor in resolving banking challenges, the path to full integration remains complex. As exchanges like Binance appoint compliance experts and regulators like AUSTRAC increase scrutiny, the Australian crypto landscape continues to evolve amid ongoing challenges and opportunities.

Source:

[1] Australians still feel bank 'friction' despite years of crypto progress (https://cointelegraph.com/news/crypto-exchange-users-australia-still-face-banking-barriers)

[2] Australia: Crypto in the Courts – ASIC v Finder Update (https://www.fintechlawblog.com/2025/09/02/australia-crypto-in-the-courts-asic-v-finder-update/)

[3] DIY retirement savers in Australia trim crypto nest eggs by 4% (https://cointelegraph.com/news/crypto-investment-australia-retirement-funds-ato)

[4] Binance Taps Compliance Veteran for APAC Role as ... (https://finance.yahoo.com/news/binance-taps-compliance-veteran-apac-053702648.html)