UK Lawmakers Press Banks Over Crypto Debanking Restrictions

UK lawmakers are pressing major banks to clarify their policies on cryptocurrency businesses and transactions. The Crypto and Digital Assets All-Party Parliamentary Group has written to bank leaders, seeking greater clarity on how banks currently approach crypto-related businesses and whether those policies will change once the UK's new regulatory framework takes effect.

The group warns that difficulties obtaining bank accounts and payment services could undermine Britain's attempt to establish itself as a global center for digital assets. The issue has become increasingly important because cryptocurrency companies remain dependent on traditional financial infrastructure, even when their core businesses are built on blockchain technology.

Major UK banks have already introduced limits or restrictions involving cryptocurrency transactions. According to the Financial Times, HSBC, NatWest, Monzo, and Nationwide have imposed limits on the amount customers can send to crypto exchanges, with reported monthly limits ranging from £5,000 to £10,000. Other institutions have imposed broader restrictions on transfers to crypto platforms.

The parliamentary group is examining whether banks should take regulatory status into account when deciding whether to provide services. They want to understand how banks currently assess the risk of cryptocurrency transactions and whether those assessments will change once the UK's new regulatory regime takes effect.