UK Created Crypto Banking Problems

According to crypto advocates, many UK crypto firms are struggling to secure banking services due to several banks limiting their interactions with the industry. This issue is not unique to the US, where the collapse of Silicon Valley, Signature, and Silvergate banks forced US crypto clients to search for new banking partners. Since 2021, the UK has also faced a crypto banking problem.

In a letter to the Treasury’s Economic Secretary Andrew Griffith, Su Carpenter, the director of operations at CryptoUK, a lobbying group advocating for digital assets, expressed concerns that many of the major UK banks have implemented bans or restrictions, and other banks and Payment Services Providers (PSP) may soon follow suit.

Twitter has also been abuzz with people complaining that UK banks are prohibiting transfers to crypto exchanges. Lisa Cameron, a member of Parliament and the chair of the Crypto and Digital Assets group, recently stated that crypto businesses have been unable to open bank accounts with Santander and NatWest Group, an issue she raised in parliament.

According to a statement from a NatWest spokesperson, the bank does not currently offer banking facilities to businesses that buy or sell cryptocurrencies. Santander also informed CoinDesk in a statement that they make all decisions on onboarding new businesses on a case-by-case basis depending on the specific details of each business.

In recent years, UK banks have been distancing themselves from crypto. In February, Alison Rose, the CEO of NatWest, informed the House of Commons Treasury committee that the bank had been blocking retail and wealth customers from transferring into crypto assets because of the volatility and instability of the platform. At the time, Rose also cited fraud as another reason.

To protect consumers from crypto-criminals, NatWest announced via email in March that it would limit customer payments to crypto exchanges to £1,000 per day and £5,000 over a 30-day period. Many other banks have opted to limit crypto payments to exchanges to safeguard their customers from risks. Nationwide and HSBC both imposed restrictions on crypto purchases around the same time.

Last year, Spanish bank Santander, which has UK branches, restricted transactions to crypto exchanges to £1,000 per transaction, while Starling Bank, a UK-based bank, stated that it no longer supports buying and selling cryptocurrencies by debit card or bank transfers and has never directly banked crypto companies.