Currently, about 40% of domestic cryptocurrency transfers are delayed or completely rejected by UK banks. Furthermore, four out of five exchanges have seen an increase in blocked transactions over the past 12 months.
Some lawmakers are now questioning this trend. They warn that the refusal of major banks to accept crypto clients could potentially paralyze the growth of the UK market.
Currently, leaders of the UK parliamentary group on cryptocurrencies and digital assets have called on UK banks to explain their position towards companies operating with digital assets, following numerous reports of difficulties faced by crypto companies when opening bank accounts.
For some time, crypto company executives have also been protesting that financial institutions are hindering the operations of legitimate digital asset businesses, even if these firms are properly registered and comply with current regulations.
In June, the organization Stand With Crypto UK even mobilized its 286,000 members to challenge UK retail banks over widespread restrictions on cryptocurrency transactions.
Earlier, the UK government called for fair treatment of cryptocurrency providers.
In early July, the UK Parliament's cross-party group on digital assets launched an investigation to examine how major credit institutions block accounts and restrict transactions for companies operating with digital assets. At that time, the group insisted: "Access to banking services is fundamental to any legitimate business, and where unnecessary barriers exist, they can hinder growth, investment, and innovation."
Nevertheless, the group maintains this position. Most recently, co-chairs of the parliamentary group on cryptocurrencies and digital assets, Lord Waizi and MP Gurinder Singh Ghosn, stated that banks are slowing down the cryptocurrency boom in the UK by hindering crypto companies' access to their services.
They also warned that the restrictions imposed by banks risk undermining the effectiveness of the UK's upcoming regulatory framework for cryptocurrencies. Currently, the UK's digital asset industry is preparing for the adoption of new regulatory rules starting October 2027.
Some bank executives justify their actions by arguing that these measures are necessary to protect customers from the rise in cryptocurrency fraud schemes and the risk of significant losses due to price volatility.
Primarily, the Financial Conduct Authority (FCA) has intensified its warnings about cryptocurrency-related risks in recent months, exacerbating banks' concerns about potential large fines for unintentionally facilitating illegal financial activity.
Earlier this year, a representative of the UK Treasury, the country's economic and financial department, stated that the government expects banks to treat all businesses in the crypto sector fairly, including licensed firms, and will not restrict service provision to licensed companies only.
Banking Restrictions Could Undermine the UK's Crypto Ambitions
The imposed restrictions also raise questions about whether the UK can attract companies operating with digital assets while they struggle to access basic banking services.
The problem may intensify as the government introduces a clearer regulatory framework for digital assets. Legislators and industry representatives argue that maintaining banking restrictions could hinder the scaling of legitimate crypto businesses and weaken the UK's position as a global hub for digital assets.
Some Are Concerned About Political Changes in the UK
Meanwhile, Andy Burnham of the Labour Party recently took office as Prime Minister. However, some fear that his administration may not prioritize the fintech industry or the digital asset industry.
Burnham has already stated his intention to halt the digital identity project and instead focus on providing economic assistance to citizens, which has elicited mixed reactions. However, Jonathan Herbst from Norton Rose Fulbright assured the nation that the Chancellor would implement stable financial reforms.
"For international companies, part of the UK's appeal is the stability of the regulatory environment; therefore, capital markets, fintech, digital assets, and sustainable finance will continue to be important tests of this commitment," he said.
