The U.K. Has A Growing Crypto Problem And Banks Are To Blame For Their Narrow-Minded Approach

CryptoMode U.K. Banking Problem Crypto

Crypto advocates are calling on the U.K. government to address the banking challenges many of the country’s crypto companies face. 

Numerous banks in the U.K. are imposing restrictions on their interactions with the crypto sector, making it difficult for many crypto businesses to obtain banking services.

This problem is not unique to the U.K., as U.S. crypto clients have had to seek new banking partners following the collapse of Silicon Valley’s Silvergate and Signature banks. 

However, the issue has been ongoing in the U.K. since 2021. Significant U.K. banks have since implemented bans or restrictions, which could be followed by other banks and Payment Services Providers (PSP).

In a letter to the Treasury’s Economic Secretary Andrew Griffith on Monday, Su Carpenter, director of operations at CryptoUK, a lobbying group advocating for digital assets, expressed concerns over the banking restrictions. The group has urged the government to intervene and resolve the issue.

Social media users have also complained that U.K. banks have been banning transfers to crypto exchanges, making it difficult for individuals and businesses to engage with the crypto market.

Santander and NatWest Group are among the banks that have denied banking services to crypto businesses, an issue recently raised in parliament. NatWest’s spokesperson explained that the bank currently does not offer banking facilities to businesses that buy or sell cryptocurrencies, stating that the bank’s stance is constantly under review.

U.K. banks have been distancing themselves from the crypto sector in recent years. For example, Alison Rose, the chief executive officer of NatWest, informed the House of Commons Treasury Committee in February that the bank had been blocking retail and wealth customers from transferring into crypto assets.

That is due to the volatility and stability of the platform. She also cited fraud as another reason for the bank’s decision.

In March, NatWest announced via email that it would limit customer payments to crypto exchanges to £1,000 ($1,232) per day and £5,000 ($6,161) over a 30-day period. The bank cites the need to protect consumers from “crypto-criminals.” Other banks, such as Nationwide and HSBC, also imposed restrictions on crypto purchases around the same time.

Spanish bank Santander, which has U.K. branches, limited transactions to crypto exchanges last year to £1,000 per transaction. Meanwhile, Starling bank, a U.K.-based bank, has ceased to support buying and selling cryptocurrencies by debit card or bank transfers and never directly banked crypto companies.

The banking restrictions imposed by U.K. banks have created significant challenges for crypto businesses and individuals alike. The government’s i1ntervention is necessary to resolve this issue and provide a conducive environment for crypto adoption and growth in the country.

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