The crypto industry has long grappled with a persistent challenge: debanking. Despite recent policy reforms in jurisdictions like the United States and Australia, many digital asset firms still face difficulty securing banking services. Concerns over reputational risk, compliance burdens, and regulatory ambiguity have led traditional financial institutions to avoid partnerships with crypto businesses, leaving a significant portion of the industry excluded from the economic system.
What Is Debanking?
Debanking refers to the denial, withdrawal, or refusal of banking services to individuals or businesses. In crypto, it often results from perceived risks associated with money laundering, fraud, and volatile market behavior. Financial institutions, wary of regulatory scrutiny or reputational harm, opt to limit or cease services to crypto-related entities.
U.S. Policy Shifts: Progress, But Not a Panacea
In the United States, some progress has been made under the early days of the Trump administration’s second term. Notably, regulators repealed SAB 121, a controversial guideline that required banks offering crypto custody to list the assets as liabilities on their balance sheets. This change removes a significant disincentive for banks to provide digital asset services.
Furthermore, Rodney Hood’s appointment as head of the Office of the Comptroller of the Currency (OCC) marked a more crypto-friendly shift. Under his leadership, the OCC has supported banks engaging in crypto custody, stablecoin reserves, and blockchain operations. Dennis Porter of Satoshi Action emphasized that this marks a “significant shift” in how traditional finance engages with crypto.
Despite this momentum, industry leaders like Caitlin Long, CEO of Custodia Bank, warn that debanking remains unresolved. Long noted in March 2025 that crypto-friendly banks are still under heavy scrutiny from Federal Reserve examiners, a situation unlikely to change until at least early 2026, when new Fed appointments may take effect.
Australia’s Approach: Regulatory Framework Underway
Australia also attempts to address debanking through legislation. The ruling Labor Party introduced a bill to provide a clear legal framework for crypto operations, giving banks the regulatory clarity needed to serve crypto clients.
According to Edward Carroll of MHC Digital Group, debanking in Australia is not driven by direct regulatory orders but rather by risk aversion stemming from unclear compliance expectations. Carroll remains optimistic, citing bipartisan interest in establishing formal crypto regulation as a sign of progress.
Canada’s Stagnation: A Risk-Averse Environment
In contrast, Canada shows little sign of immediate relief. Morva Rohani, Executive Director of the Canadian Web3 Council, stated that debanking is a “severe and persistent” issue. Many firms face unexplained account closures and service denials, often without clear recourse.
Canada’s banking sector is highly conservative regarding crypto, driven by stringent AML and KYC expectations. Political headwinds further complicate matters, with leading Liberal Party candidate Mark Carney promoting CBDCs rather than decentralized crypto solutions.
Criticism and Counterarguments
Not everyone agrees with the narrative about debanking. Critics like Molly White argue that the crypto industry has co-opted the term to resist necessary regulatory oversight. She points out that legitimate concerns around financial discrimination are conflated with crypto companies’ efforts to avoid compliance responsibilities.
She also notes the irony in some crypto leaders supporting deregulatory moves while undermining consumer protection agencies like the CFPB, which historically addressed debanking complaints.
Industry Workarounds and the Path Forward
Without universal banking support, crypto firms turn to alternative solutions. These include using stablecoins for operational liquidity and partnering with niche regional banks or trust companies that are more open to digital asset services.
While these ad hoc strategies provide short-term relief, they introduce higher operational costs and risks. Rohani warns that these patchwork arrangements are unsustainable for long-term growth and do not support the development of a competitive, regulated digital asset industry.
Nevertheless, Dennis Porter believes these alternatives may evolve into fully integrated relationships with the broader financial ecosystem, helping normalize crypto within traditional finance.
Conclusion
Debanking remains a complex and unresolved issue for the global crypto industry. While the United States and Australia are making legislative strides to support crypto firms, Canada and other jurisdictions lag. Until consistent, transparent, and balanced regulatory frameworks are in place, crypto companies will continue to face chanllenges to essential financial services.