UK Parliament Asks Banks to Stop Ghosting Crypto: "We Were Swiping Right on You" 🇬🇧

A United Kingdom parliamentary group has opened an inquiry into whether crypto businesses and consumers are being unfairly cut off from banking services, including account access and restrictions on crypto-related transactions. The Crypto and Digital Assets All-Party Parliamentary Group (APPG) said on Monday it would examine how the restrictions affect investment, competition and economic growth, and whether the measures are proportionate.

The inquiry is co-chaired by Lord Vaizey of Didcot, a former digital economy minister, and Labour MP Gurinder Singh Josan. It comes weeks after the UK finalized its new crypto regulatory framework and will test whether banking barriers could undermine the Government's goal of making the country a "global leader in digital assets." "Access to banking services is fundamental for any legitimate business, and where unnecessary barriers exist they have the potential to hinder growth, investment and innovation," Josan and Vaizey said in a joint statement, adding it was "the right time" to examine whether remaining barriers could undermine the UK's ambitions ahead of its crypto regime coming into force.

The APPG said UK crypto firms have long complained of difficulty opening or keeping bank accounts, while UK banks including HSBC, Nationwide, NatWest, Santander and Starling Bank have restricted crypto-related payments. The inquiry will look at access to accounts and services, including insurance, as well as the transfer limits and payment blocks imposed by lenders.

Research published by the UK Cryptoasset Business Council in January found banks were blocking or delaying an estimated 40% of attempted transfers to crypto exchanges, and 70% of exchanges surveyed said the restrictions were hurting investment, expansion or hiring in the UK. The APPG's own 2023 inquiry reached similar conclusions, warning the friction risked undermining the UK's digital asset hub ambitions. HM Treasury has since said regulated firms should not be shut out simply for operating in crypto, and in March Economic Secretary Lucy Rigby told Parliament that under the new regime the Government "would not expect" FCA-licensed crypto firms to be "subject to restrictions by banking services providers simply because of the sector they belong to."

Written submissions from banks, payment providers, crypto firms and other stakeholders are open until Aug. 31, after which the group plans to publish its findings and recommendations. The inquiry comes ahead of the Financial Conduct Authority beginning to accept authorization applications from crypto firms on Sept. 30.