Banks in the United Kingdom are prohibiting transactions and interactions with cryptocurrency companies and exchanges, according to a Bloomberg story on April 2.
According to the report, HSBC and Natwest have limited the amount of money users can shift onto cryptocurrency exchanges. In 2021, Barclays will likewise suspend transfers to Binance. For the time being, crypto requires on and off ramps for fiat. Regrettably, this implies relying on banks, and transaction limits are only one tactic in the arsenal of a high street bank.
Some crypto CEOs have cited difficulties dealing with UK banks. The problems, according to the report, ranged from excessive
SavingBlocks, a London-based crypto company, claimed difficulty in engaging with banks. The crypto passive portfolio company requested a corporate account from nine different banking service providers. According to Bloomberg, seven of them turned it down.
“There aren’t many options accessible,” said company founder Edouard Daunizeau, before adding that “most traditional banks won’t supply banking services to crypto firms.” He is considering relocating to more favorable climates in Europe.
“With the recent sequence of events, it will be considerably more difficult.” We are looking for permits in France, where we believe the process will be simpler.”
“The UK financial reaction has been more acute than the EU reaction,” said Tom Duff-Gordon, Coinbase’s vice president of international strategy. Banks dislike cryptocurrency because it threatens their business paradigm. They cite concerns about money laundering, but the fact is that banks profit from other people’s money while providing little in return.
Prime Minister Rishi Sunak announced an initiative to attract cryptocurrency enterprises to the UK in April 2022. Yet, the banking blockade is making their lives extremely tough.
Additionally, crypto venture capital funding in the United Kingdom has declined. In contrast, it is still relatively healthy throughout Europe.
The restricted access to banking, according to Jeff Hancock, CEO of London-based crypto exchange Coinpass, “hijacks any effort to make the UK a crypto centre, which is what Rishi and the government say they want.”
As a result, cryptocurrency businesses are turning to payment service providers like Stripe and Wise. They, too, are subject to financial restrictions, which frequently prevent them from interacting with cryptocurrency enterprises.
In early March, Economic Secretary Andrew Griffith stated that the Treasury would “attempt to fix the matter with lenders.”
Until then, Britain’s banks will maintain their stranglehold on the budding cryptocurrency market.
