Many U.K. crypto companies are finding it difficult to obtain banking services because numerous banks are limiting their interaction with the sector altogether, crypto advocates said.
Following the collapse of the U.S.’s Silicon Valley, Silvergate and Signature banks, U.S. crypto clients have had to look for new banking partners. However, the U.S. is not the only country with companies experiencing this dilemma. The U.K. has created a crypto banking problem since as far back as 2021.
“Many of the major U.K. banks have now put in place bans or restrictions, and we are concerned that other banks and Payment Services Providers (PSP) may also soon follow suit,” wrote Su Carpenter, director of operations at CryptoUK, in a letter to the Treasury’s Economic Secretary Andrew Griffith on Monday. CryptoUK is a lobbying group advocating for digital assets.
Lisa Cameron, a member of Parliament and the chair of the Crypto and Digital Assets group, said in a statement to CoinDesk that crypto businesses have been unable to open bank accounts with Santander and NatWest Group, an issue she raised in parliament recently.
A spokesperson for NatWest said the bank does not “currently offer banking facilities to businesses [that] buy or sell cryptocurrencies. This is a rapidly evolving space in the U.K. and we keep our stance under constant review.”
“We make all decisions about onboarding new to bank businesses on a case-by-case basis based on the specific details of each business,” a spokesperson from Santander told CoinDesk in a statement.
Banks limiting crypto payments
U.K. banks have been pulling away from crypto in recent years. Alison Rose, the chief executive officer of NatWest, told the House of Commons Treasury committee in a hearing in February that the bank had been “blocking retail and wealth customers from transferring into crypto assets because of the volatility and the stability of the platform.” Rose also cited fraud as another reason at the time.
In March NatWest began limiting customer payments to crypto exchanges to 1,000 British pounds (US$1,232) per day and 5,000 British pounds ($6,161) over a 30-day period, to protect consumers from “crypto-criminals,” NatWest announced via email.
Many other banks have opted to limit crypto payments to exchanges in order to protect their consumers from risks. Nationwide and HSBC both announced restrictions on crypto purchases around the same time.
Spanish bank Santander, which has U.K. branches, limited transactions to crypto exchanges last year to 1,000 British pounds per transaction, while U.K.-based Starling bank said it no longer supports the buying and selling of cryptocurrencies by debit card or bank transfers and never directly banked crypto companies.
Meanwhile London-based Barclays limited transfers to Binance in 2021, the Financial Times reported.