Happy holidays crypto enthusiasts, moon boys/girls, and internet stalkers. There was an interesting video released on Reddit which is simply a clip from the 6 hour discussion on the pending Cash Ban in Australia. What is interesting about this clip is that it targets cryptocurrency.
Therefore, I wanted to cover the discussion briefly and talk about what the purpose of the ban was, what the Reddit video was showing, and then also talk about a video released by Nugget News on the problems small businesses are having with banks.
Nothing should be considered investment or financial advice. Enjoy the ride.
Australian Cash Ban Bill
For those unfamiliar with the recent discussion, the Australia Cash Ban Bill had a Senate hearing to discuss the pros and cons of the bill. In short, the ban is supposed to limit all cash transaction to a cap of $10,000 dollars. Obviously, there is more to the bill, but lets focus on this.
Overall, more witnesses called to discuss the bill opposed the cash ban, and the people who supported the bill did not have very good points or an angle to push the agenda of the bill. From my perspective, the sentiment throughout the hearing seems to echo the problem of, why is this even being proposed in the first place?
The bill is currently being pushed by the Australia Cash regulatory body, Austrac. A great part about the hearing was that crypto was specifically mentioned and the Reddit video leads us exactly to this discussion.
Leading the questioning was Senate Economics Legislation Committee member, Rex Patrick, who posed several questions to the Austrac representative on the basis of cryptocurrency in Australia. To point out a question, Rex Patrick wanted to know how long Austrac had been regulating the crypto industry and how they have been going about this.
Austrac Regulation on Crypto
Per the hearing, Austrac has been regulating Exchanges since April 2018 in order to combat money laundering, terrorism financing, and illegal activity. Specifically, Austrac has been regulating the mediums of cryptocurrency exchange and not the currencies themselves.
They also target any entity that exchanges any physical currency into digital currency. These businesses in total are required to register and enroll with Austrac, adopt a program to manage and mitigate their risks, and too keep records or KYC on customers
Currently, Austrac claims they work closely with the digital currency exchanges and providers to make sure they apply with the Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) pact made through the International Monetary Fund (IMF) in which certain countries agree to uphold.
Impact of Regulation
Although, what Austrac does not currently seem to regulate is the amount of currency flowing through each exchange. This is due to the fact that the department does not regulate the actual currency, but rather the entities that use, distribute, and trade them.
Rex Patrick voiced a great concern from the Cash Ban, that the Austrac could simply be driving criminals to another place, or unregulated bodies. The Austrac rep combated this with the statistics that so far there are 306 registered digital currency exchange providers as of 30 November, 2019 with only 3 registrations refused and 3 other registrations canceled.
Banks Control Small Business
From another video by Nugget’s News on the 6 hour hearing that is trying to summarize the large amount of content, there was a great simple discussion made on the small businesses side around 5 minutes into the video. Unfortunately, I did not have the time to comb the entire video, but this section caught my attention.
Overall, this section discusses the idea that banks do not like the competition they are getting from alternative currency sources similar to money transfer systems, exchanges, cryptocurrency, and alternative hard assets. Therefore, the banks are in some cases systematically unbanking certain individuals, companies, and organizations.
Small Businesses Cannot Fight the Banks
A lot of this is due to the banks currently losing large amounts of income which makes them try to fight back against the changing times. The largest impact from this is realized on small businesses who can not ideally even stand up to the banks or voice the problem effectively.
A problem posed from this talk was discussed with the guest, Robbie Barwick, Director of the Australian Citizens Party. Robbie had a small client who had been put out of business by the banks denying them the right to hold an account. This is purely due to the competition the business held with the banks (so the guest says and we will assume).
The problem is:
In a world where you are legally required to use the banks, how can you have a system where the banks are completely allowed to debank you.
Banks Choose Non-autonomous System Over Free Market
Clearly, this should not be the case as the banks have proven time and time again to choose their own needs and desires over the general population’s good and well being. The banks will do whatever it take to uphold the control over domestic and foreign currency, economic standing, and fiscal responsibility. This is a problem that crypto can clearly fix and mostly likely will over time.