Okay, now I understand, you know very little about banking. I started a bank so I will try to help.
Banks are mostly private companies (most are listed on stock exchanges) so public companies in that meaning, but in most cases they are not government owned. I was meaning private in the sense they are not public owned entities by the government.
Banks are highly regulated.
Regulations require banks to manage their risks mainly liquidity and capital risks plus operational risks.
There is no laws mandating banks must bank everyone and every business.
There are laws that mandate banks must not take on excessive risks.
Banking is a principle based regulation. This means the governments set laws based on guidelines of how banks meet the obligations.
Banks are managing their customers constantly and any customer that represents unmanageable risks mainly liquidity they must remove them from their balance sheets.
It is the crypto industry fault that they refuse to take the actions and accountability to work with the banks.
This doesn’t only happen in crypto.
Crypto is highly volatile and liquidity is unmanageable for banks. When I spoke to the regulators, we were told we had to hold 100% liquidity for deposits intended for crypto. There is zero ability to recover the losses of the liquidity obligations.
Like all businesses, banks have the right to refuse to service customers they don’t want to serve because the costs exceed the income.
On the flip side the crypto industry is refusing to accept the additional costs and refusing to derisk their platforms.
> It is the crypto industry fault that they refuse to take the actions and accountability to work with the banks.
Yes and no. Are there many bad actors in the crypto industry who would be refused service by a reasonable, rule-of-law-based banking system? Yes, absolutely. Is the banking system that the US currently such a system? No. The SEC spent two years pretending to come up with a system of rules for determining whether a cryptocurrency is a security or not, and they still can't - or rather won't - tell you whether Ethereum qualifies.
Think of a guy trying to buy a house in a redline district. He says "I met all their lending criteria, but the bank still denied my loan, and they won't even tell me why! I don't even know what I did wrong or what I have to do to get them to approve me!" Is he lying? Strictly, yes, he probably does know exactly why his loan was declined and what he would have to do to get approved. So his statement is disingenuous in that way. But my sympathies are still with him.
> Like all businesses, banks have the right to refuse to service customers they don’t want to serve because the costs exceed the income.
Not in general - the article already mentions how they are obliged to serve unprofitable zip codes. Again, this is the current state of the US system (partly the result of written law and partly of other things), not inevitable objective fact, not something that can't be changed, and not something that the banking industry has no input into.
Banks are mostly private companies (most are listed on stock exchanges) so public companies in that meaning, but in most cases they are not government owned. I was meaning private in the sense they are not public owned entities by the government.
Banks are highly regulated.
Regulations require banks to manage their risks mainly liquidity and capital risks plus operational risks.
There is no laws mandating banks must bank everyone and every business.
There are laws that mandate banks must not take on excessive risks.
Banking is a principle based regulation. This means the governments set laws based on guidelines of how banks meet the obligations.
Banks are managing their customers constantly and any customer that represents unmanageable risks mainly liquidity they must remove them from their balance sheets.
It is the crypto industry fault that they refuse to take the actions and accountability to work with the banks.
This doesn’t only happen in crypto.
Crypto is highly volatile and liquidity is unmanageable for banks. When I spoke to the regulators, we were told we had to hold 100% liquidity for deposits intended for crypto. There is zero ability to recover the losses of the liquidity obligations.
Like all businesses, banks have the right to refuse to service customers they don’t want to serve because the costs exceed the income.
On the flip side the crypto industry is refusing to accept the additional costs and refusing to derisk their platforms.