03 Apr 2023 Morgan Hayze
Banks In The UK Are Reportedly Refusing To Work With Crypto Clients
Companies that work with cryptocurrencies are having a number of challenges, such as having their accounts blocked or having their applications rejected due to the UK tightening the rope of crypto regulations. Some sources claim that accessing banking services is challenging for UK-based crypto firms. The few remaining banks that continue to operate with cryptocurrency firms want more assurance and information on how they track consumer transactions.
A lot of paperwork, banned accounts, and rejected applications are all challenges. During the last several weeks, as the situation deteriorated, Bitcoin companies even voiced their displeasure to Prime Minister Rishi Sunak's office.
The decision goes against Sunak's goals of fostering financial technology innovation and making the UK a significant crypto center.
Tom Duff-Gordon, vice president of international policy at the Coinbase cryptocurrency exchange, noted that banks are becoming more receptive to crypto companies in other countries as a result of the European Union's initiatives to establish a framework for digital assets. "The U.K. banking reaction has been more acute than the EU one," he added.
The European Parliament's committee adopted the Markets in Crypto Assets (MiCA) legislation in October, nearly two years after it was first put out in September 2020 with a final decision expected for April.
PitchBook figures claim that, so far in 2023, venture capital investment in firms using digital assets has plummeted 94% in the U.K. to $55 million, while increasing 31% in other European countries. Cryptocurrency businesses are using payment service providers like Stripe and BCB Payments to stay in business in the UK.
Early in March, HSBC Holdings and Nationwide Building Society joined a growing list of institutions throughout the country that have tightened their policies on digital assets by forbidding retail clients from buying cryptocurrencies using credit cards.
In response to banks limiting or prohibiting transactions with cryptocurrency firms, the self-regulatory trade association CryptoUK proposed a "white list" of permitted businesses in the country in March.
“Many of the major U.K. banks have now put in place bans or restrictions, and we are concerned that other banks and Payment Services Providers (PSPs) may also soon follow suit,” CryptoUK added.
As in the United States, authorities in the United Kingdom are tightening their regulations on Bitcoin enterprises. The Financial Conduct Authority posted a set of rules in February that, if they are broken, could land the heads of crypto firms in prison for two years.
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