UK Banks Strangle Crypto Adoption Amid Fears of Fraud
The UK government's goal of becoming a global hub for digital assets is being hindered by banking restrictions on crypto transactions. According to Bitcoin Policy UK, approximately 40% of bank-to-exchange transfers in the UK are currently blocked or delayed.
Several major banks, including Virgin Money, Metro Bank, Starling Bank, TSB, and Chase UK, block certain crypto payments outright, while others like Barclays and HSBC cap transfers at £2,500 per transaction. A survey by Startup Coalition found that half of firms had been refused a bank account or had one closed.
Banks argue that crypto transactions expose customers to scams and irreversible losses, but critics say blanket restrictions fail to distinguish between offshore businesses and FCA-registered platforms.
Bitcoin Policy UK is calling for clearer regulatory guidance, specific reasons for rejected transactions, an appeals process, and recognition of FCA registration in bank risk assessments. The issue will become more pressing as the UK moves towards full crypto regulation from October 2027.