Even though the crypto industry has seen rapid growth in recent years, many crypto firms have yet to find a banking partner to open a bank account. As a result, crypto firms have been left with limited options, such as using peer-to-peer networks or relying on third-party services to facilitate payments.
Hence, UK lobbying groups and lawmakers have called for the government to act. They argue that the current situation has created an unfair environment for crypto customers and stifled innovation in the sector.
A Plea To The Treasury For Support
Crypto advocates in the U.K. have noted that many firms in the industry face difficulties securing banking services, with numerous banks choosing to cut off their ties with the sector entirely. This issue has been present since 2021 and only came to light again after the crisis that affected Silvergate, Signature bank, and Silicon Valley, all of which were crypto-friendly banks.
The Treasury’s Economic Secretary and CryptoUK’s Director of Operations, Su Carpenter, commented, “numerous prominent British banks have implemented prohibitions or limitations, and the organization is worried that more banks, and Payment Services Providers (PSP), could take similar steps.”
CryptoUK is a lobby team that advocates for digital assets. There have also been numerous grievances on Twitter regarding UK banks prohibiting transfers to cryptocurrency exchanges.
Lisa Cameron, a representative of the British Parliament and leader of the Crypto and Digital Assets group, added that crypto organizations have been unable to open financial balances with Santander and NatWest Group, an issue she previously presented in the House of Commons.
A representative for NatWest stated that the bank doesn’t “presently offer banking services to organizations [that] purchase or sell digital forms of money even though it is a quickly evolving field in the UK.”
A Santander spokesperson stated that every business they consider onboarding is subject to thorough evaluation.
UK Banks Put Restrictions on Crypto Payment to Protect Against CryptoCriminals
In recent years, British banks have been withdrawing their involvement with crypto. At a hearing last month in the House of Commons Treasury committee, NatWest’s CEO, Alison Rose, stated that the bank had blocked retail and wealth customers from transferring into crypto assets because of their volatility and the platform’s security.
Earlier this month, NatWest sought to protect customers from “crypto-criminals” by instituting a daily limit of £1,000 (or $1,232) and a 30-day limit of £5,000 (or $6,161) on payments to crypto exchanges. This announcement was via email.
Many other financial institutions have decided to prevent their customers from making crypto transactions to exchanges to protect them from potential risks. Nationwide and HSBC declared similar constraints on buying crypto within a tight timeframe.
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