UK Parliament Probes Banking Barriers for Crypto Firms
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- The Crypto and Digital Assets All-Party Parliamentary Group launched an inquiry into whether banks are imposing disproportionate restrictions on crypto businesses and consumers, accepting written submissions from banks, payment providers, and crypto firms until Aug. 31.
- A January UK Cryptoasset Business Council survey of 10 exchanges — Coinbase, Kraken, Gemini, OKX, Bitpanda, Luno, Uphold, Wirex, Zumo and Xapo Bank — found banks blocked or delayed 40% of transactions to crypto platforms, with 8 of 10 reporting increased blocks over the prior year.
- 70% of surveyed exchanges said the restrictions had cut their willingness to invest, expand or hire in the UK, and 7 of 10 described the banking environment as becoming more "hostile."
- One unnamed exchange reported nearly £1 billion ($1.35 billion) in transactions declined by UK banks over a single year, covering rejected card payments and open banking transfers.
- Yuriy Brisov of Digital & Analogue Partners told Cointelegraph that banks' blanket policies and fixed transaction caps fail to distinguish between FCA-registered exchanges and unlicensed offshore platforms, arguing supervisors should require written justification for any continued de-banking of licensed firms.
- The UKCBC urged the Financial Conduct Authority to require banks to differentiate between exchanges by regulatory status, governance and fraud controls rather than applying uniform restrictions.
- The inquiry lands ahead of the FCA opening its crypto firm authorization window on Sept. 30, with HM Treasury's full Cryptoassets Regulations — laid before Parliament in December 2025 — expected to take effect in October 2027.
Why it matters: The inquiry exposes a timing contradiction at the heart of UK crypto policy: the FCA starts licensing crypto firms on Sept. 30 while a UKCBC survey shows banks are already blocking 40% of crypto-related transactions, with one exchange alone logging £1 billion in declined transfers in a year. If licensed firms cannot access banking, the UK's 'crypto hub' branding loses its most basic operational meaning and investment continues migrating abroad.
