Two co-chairs of the U.K. Parliament’s Crypto and Digital Assets All-Party Parliamentary Group have written to the chief executives of every major British bank, asking them to explain how their institutions treat crypto and digital asset companies.
The letter was sent Tuesday by Labour MP Gurinder Singh Josan and Lord Vaizey of Didcot, a former digital economy minister. In it, they said the group has heard repeated reports that crypto and digital asset firms have struggled to open accounts with U.K. banks. They also pointed to accounts of several banks restricting crypto-related payments.
Lawmakers say banking access may be a major growth barrier
The co-chairs wrote that access to banking services could be one of the biggest barriers to growth for U.K. crypto and digital asset businesses. They said the issue could also undermine the success of the country’s forthcoming crypto regime and affect the decisions of firms considering whether to invest in the U.K.
The letter asks each bank to answer six questions: what its policy is, whether it currently serves crypto firms and, if not, why not; what limits it applies to crypto-related transactions; what factors shape that approach; whether the incoming regime will change it; and what the government or regulators could do to help.
Josan and Vaizey said they recognize that banks have legal duties to prevent financial crime and protect consumers. Still, they noted that many firms argue those decisions should reflect a company’s individual risk profile more than the sector it belongs to.
Vaizey told the Financial Times that the difficulties amount to “an unnecessary piece of friction” in running a business and rank among the obstacles facing anyone trying to set up a company in the U.K.
Several U.K. banks have tightened crypto payment rules
Major U.K. banks including HSBC, Nationwide, NatWest, Santander and Starling have curbed crypto-related payments in recent years. Research published in January by the U.K. Cryptoasset Business Council found that banks were blocking or delaying an estimated 40% of attempted transfers to crypto exchanges.
According to the Financial Times, banks cite a rise in crypto-related scams and the risk that retail customers could lose large sums because of price volatility. The report said HSBC, NatWest, Monzo and Nationwide cap monthly transfers to crypto exchanges at between £5,000 and £10,000, while Starling and Chase UK prohibit them entirely.
Crypto losses are not covered by the Financial Services Compensation Scheme, the report added.
HM Treasury has already acknowledged the issue
HM Treasury has already conceded that the problem exists. In March, Economic Secretary Lucy Rigby told Parliament that under the new regime the government “would not expect” firms licensed by the Financial Conduct Authority to face restrictions from banks simply because of the sector they belong to.
The letter comes after the APPG launched an inquiry into banking access on July 21. The group is accepting written evidence until Aug. 31 and will then report to the government. The co-chairs said their letter is not meant to pre-empt the findings of that inquiry.
The Financial Conduct Authority finalized its rules for the sector in June. The regime is due to become mandatory in October 2027.
Debanking disputes have surfaced outside the U.K.
Disputes over crypto debanking have also surfaced in other markets. In the United States, some firms have blamed a pressure campaign they call Operation Chokepoint 2.0 for severing their banking relationships. Kraken, meanwhile, won $22 million from an auditor it said abandoned the exchange during that episode.