UK Banks Continue to Impede Bitcoin Transactions, Says Bitcoin Policy UK

Bitcoin Policy UK has expressed strong disapproval of British banks for their ongoing blanket restrictions on lawful bitcoin activities. In a recent announcement, the organization revealed that it submitted evidence to the Crypto and Digital Assets All-Party Parliamentary Group (APPG) regarding banking access, highlighting that no improvements have been made in the treatment of bitcoin transactions over the past three years.

The core issue stems from the UK’s regulatory framework, which categorizes all cryptocurrencies under a single umbrella, subjecting bitcoin to rules designed for unbacked tokens and issuer-dependent stablecoins. Despite the British government’s directive since 2023 for banks to evaluate transactions on a case-by-case basis, Bitcoin Policy UK claims that this guidance has not been implemented in practice, leading to a widening gap as the UK approaches the full implementation of its cryptoasset regime by 2027.

According to the organization, approximately 40% of bank-to-exchange transfers in the UK are currently either blocked or delayed. Bitcoin Policy UK has called for banks to provide specific reasons for rejecting bitcoin-related transactions. Their findings indicate that many fintech and crypto firms in the UK face significant banking challenges, with a joint survey revealing that half of the firms had either been denied a bank account or had existing accounts closed.

Several banks, including Virgin Money, Metro Bank, and Starling Bank, have been noted for outright blocking transfers and card payments related to bitcoin. Meanwhile, Barclays and HSBC impose strict limits on transfers, capping them at £2,500 per transaction. The organization pointed out that 80% of exchanges reported an increase in restrictions over the previous year, with no signs of improvement.

In its submission to the APPG inquiry, Bitcoin Policy UK made four key requests: a regulatory statement clarifying that bitcoin activity through FCA-registered exchanges should not face blanket restrictions, a requirement for banks to provide specific reasons for transaction rejections along with an appeals process, confirmation that FCA registration can serve as a risk basis, and a regular publication of restriction levels.

City Minister Lucy Rigby previously stated that the UK has the potential to compete with the United States and establish itself as an international hub for cryptoassets.