UK banks are resisting the government’s crypto push

Updated: 03 April 2023

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The UK has recently found itself in a conflict involving the crypto industry. The country’s Prime Minister, Rishi Sunak, reportedly has great plans for turning the country into a crypto hub. However, UK banks seem to disagree with these plans, as they are making it difficult for cryptocurrency companies to open accounts.

Even the firms that managed to open accounts with the local banks have run into issues such as restricted transactions as the banks seek to discourage dealings with crypto companies and exchanges.

UK banks object to working with crypto companies

Recent reports have specifically mentioned Natwest and HSBC as banks that have restricted the amounts that their users can move to cryptocurrency exchanges. It is also worth remembering that Barclays also halted transactions to and from Binance in 2021 when the exchange was accused of offering financial products that it did not have a license.

The situation has disrupted the crypto industry in the UK, which requires fiat on and off ramps in order for the money to continue entering and exiting the industry. Unfortunately, the crypto industry has to rely on banks, and their amount-limiting practices are putting the crypto sector in a difficult position.

A number of executives from various crypto firms have reported that they hit a wall while trying to open accounts and deal with the banks in the country. In some cases, the issues involved excessive paperwork, while in others, there were more complex bureaucratic hurdles, which have led the companies’ account applications to be rejected. In fact, it has come to the point where crypto firms are considering leaving the country and finding crypto-friendlier environments.

Crypto firms cannot open accounts with the UK banks

One of the companies that reported difficulties in dealing with UK banks is SavingBlocks, a crypto firm located in London. It acts as a passive crypto portfolio company and reported applying for corporate accounts with nine different banks. Seven of them have turned it down, and its founder, Edouard Daunizeau, said that there are not many options available for crypto companies.

“With the recent string of events, it will be even tougher. We are seeking licenses in France, where we think it will be easier,” he added. Coinbase’s VP of international policy, Tom Duff-Gordon, also noted that the UK banking reaction has been more acute than the EU one.

@getbabb @Rushdaverroes CEO Babb Group. Business account on Babb is going to be launched in Q4 2023! Another alternative to the traditional banks, they will all fade themselves out with their current attitude towards the crypto industry….. #FinTech such as Babb will pave the way… https://t.co/Xdyi5QuLKW pic.twitter.com/2X1qpdfdw4

— Ⓑ Tuan Ⓑ (@uk_tuan) April 3, 2023

Given the fact that the crypto industry threatens the business model of traditional banks, their attempts to sabotage the rise of the crypto industry is not surprising. They constantly point out the problems with crypto, such as money laundering concerns, but in reality, the banks cannot offer the same quality of service where transactions are instant and cheap.

The country’s Prime Minister has been trying to attract crypto companies to the UK since April 2022, but the banking blockade is making it difficult for crypto firms to run their businesses.

Rishi Sunak’s plan to turn the UK into a global crypto hub turns one year old on Tuesday. unfortunately for him, banks’ refusal to work with crypto companies have become a determined roadblock

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— Emily Nicolle (@emilyjnicolle) April 2, 2023

Without the banks’ support, crypto firms that do not plan to leave have turned to Stripe and Wise for fiat on and off ramps. However, these companies are also subject to financial regulations, so they are often restricted from working with crypto companies.

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