In brief
- The Crypto and Digital Assets APPG has written to the chief executives of all major UK banks asking them to set out their approach to crypto firms.
- The letter poses six questions, including whether banks expect to change tack once the FCA regime takes effect.
- It follows a parliamentary inquiry launched on July 21, with written submissions open until August 31.
The co-chairs of Parliament’s Crypto and Digital Assets All-Party Parliamentary Group have written to the chief executives of every major UK bank, asking them to explain how they treat crypto and digital asset firms.
The letter, sent Tuesday by Labour MP Gurinder Singh Josan and Lord Vaizey of Didcot, a former digital economy minister, says the group has heard “repeated instances where crypto and digital asset firms have struggled to open accounts with UK banks,” alongside reports that several banks have restricted crypto-related payments.
“Access to banking services could be one of the single biggest barriers to growth for UK crypto and digital asset businesses, and could potentially undermine the success of the UK’s forthcoming crypto regime,” the co-chairs wrote, adding that limited access could sway the decisions of firms weighing whether to invest in the country.
The letter puts six questions to each bank: what its policy is, whether it currently serves crypto firms and why not if it does not, what limits it applies to crypto-related transactions, what factors drive that approach, whether the incoming regime will change it, and what the Government or regulators could do to help.
Josan and Vaizey said they accept that banks have legal obligations to prevent financial crime and protect consumers, but noted that many firms argue decisions should reflect a company’s individual risk profile more than the sector it sits in. Vaizey told the Financial Times that the difficulties amounted to “an unnecessary piece of friction” in running a business, and counted among the obstacles facing anyone setting up a firm in the UK.
UK banks including HSBC, Nationwide, NatWest, Santander and Starling have curbed crypto-related payments in recent years, with research from the UK Cryptoasset Business Council in January finding that banks were blocking or delaying an estimated 40% of attempted transfers to crypto exchanges.
Banks point to a rise in crypto-related scams and the risk of retail customers losing large sums to volatile prices, according to the FT, which reported that HSBC, NatWest, Monzo and Nationwide cap monthly transfers to crypto exchanges at between £5,000 and £10,000, while Starling and Chase UK bar them outright. Crypto losses are not covered by the Financial Services Compensation Scheme.
What the Government has said
HM Treasury has already conceded the problem, with Economic Secretary Lucy Rigby telling Parliament in March that under the new regime the Government “would not expect” FCA-licensed firms to face restrictions from banks “simply because of the sector they belong to.”
The letter follows the APPG’s inquiry into banking access, launched July 21, which is taking written evidence until August 31 before reporting to Government. The co-chairs said the letter is not intended to pre-empt those findings. The FCA finalized its rules for the sector in June, with the regime becoming mandatory in October 2027.
Crypto debanking has been contested in other markets, with U.S. firms blaming a pressure campaign they call Operation Chokepoint 2.0 for cutting their banking ties, and Kraken winning $22 million from an auditor it said abandoned it during the episode.
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