Both HSBC and NatWest restrict cryptocurrency purchases to platforms only. Crypto businesses are having trouble opening bank accounts.
Rishi Sunak, the Prime Minister of Britain, has ambitious plans to make the country a crypto center, but institutions in the UK have other plans.
On April 2, Bloomberg reported that British institutions were limiting customer transfers and partnerships with cryptocurrency platforms.
According to the story, HSBC and Natwest have limited the quantity of money their clients can transfer to cryptocurrency platforms. In 2021, Barclays also stopped sending funds to Binance.
Cryptocurrency currently requires conventional currency entry and exit points. That’s bad news because it means high street banks can use reliance on banks and transaction limits as just one of their weapons.
There have been multiple reports of difficulties in working with UK institutions from crypto industry leaders. The study states that the problems stemmed from application rejections, unnecessary documentation, and governmental red tape.
SavingBlocks, a cryptocurrency company located in London, recently complained about having to work with institutions. The crypto passive portfolio company attempted to open business accounts with nine separate banks. Bloomberg claims that seven of them rejected it.
Since “most traditional banks won’t offer banking services to crypto firms,” company creator Edouard Daunizeau is contemplating relocating to more welcoming European countries.
“The UK banking reaction has been more acute than the EU one,” said Coinbase’s vice president of foreign strategy, Tom Duff-Gordon.
Banks usually hold a negative view of cryptocurrency because of the danger it poses to their industry. They say it’s because of money trafficking, but everyone knows banks only care about making a profit off of other people’s deposits.
In April 2022, Prime Minister Rishi Sunak unveiled a plan to entice cryptocurrency businesses to set up shop in the United Kingdom. They are having a tough time because of the financial ban.
Additionally, investment from UK-based crypto VC firms has declined. In contrast, it is still fairly robust throughout Europe.
Despite assurances from Rishi and the government, a London-based cryptocurrency exchange CEO, Jeff Hancock, has said that the lack of financial options “hampers any effort to make the UK a crypto hub.”
Because of this, crypto businesses are increasingly using payment processors like Stripe and Wise. However, they are also bound by finance laws that prevent them from doing business with blockchain companies.
The Treasury “would try to resolve the problem with lenders,” Economic Secretary Andrew Griffith said at the beginning of March. The institutions in Britain are tightening their grip on the emerging crypto sector until then.
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