According to various people contacted by Bloomberg, crypto firms in the United Kingdom (UK) have difficulty gaining access to financial institutions. The few banks that continue to cooperate with crypto companies are asking for further documentation and details on how they monitor customer transactions.
Among the difficulties are having applications refused, having accounts blocked, and getting buried in paperwork. Since the situation has deteriorated in recent weeks, crypto firms have even protested Prime Minister Rishi Sunak’s administration.
The decision runs counter to Sunak’s intentions to promote financial technology disruption and make the United Kingdom a worldwide crypto powerhouse.
Tom Duff-Gordon, vice president of international strategy at Coinbase, told Bloomberg, “The UK bank’s response has been more severe than the EU’s.” According to Duff-Gordon, the European Union’s attempts to build a framework for digital assets have made banks in other nations more amenable to crypto businesses.
The Markets in Crypto Assets (MiCA) law was enacted by the European Parliamentary Committee in October 2022, over two years after it was initially proposed in September 2020. This month is slated for the vote’s conclusion.
According to statistics from PitchBook, venture capital investments in digital asset startups in the UK have decreased 94% to $55 million so far in 2023, compared to a 31% growth in other European nations. To continue operations in the United Kingdom, crypto firms are utilizing payment service providers like BCB Payments and Stripe.
Earlier in March, HSBC Holdings and Nationwide Building Society prohibited retail customers from purchasing cryptocurrencies with credit cards, joining a growing number of U.S. institutions that have tightened limits on digital assets.
Earlier in March, the self-regulatory trade group CryptoUK advocated the formation of a “white list” of registered enterprises in the nation in response to banks restricting or prohibiting crypto-related transactions.
“Many of the largest UK banks have now implemented bans or restrictions, and we are concerned that other banks and Payment Service Providers (PSPs) may follow suit shortly,” stated CryptoUK. “We feel that government intervention is now necessary.”
Similar to the United States, the United Kingdom is strengthening its laws on cryptocurrency businesses. In February, the Financial Conduct Authority suggested a series of rules that could condemn crypto company leaders to two years in prison if they fail to satisfy certain promotion requirements.
