UK lawmakers have warned that restrictions imposed by banks on cryptocurrency businesses and transactions could become a major barrier to growth for the country’s digital asset industry.
In a letter dated August 11, the Crypto and Digital Assets All-Party Parliamentary Group (APPG) on Tuesday asked major UK banks to explain how they decide whether to provide accounts and other services to crypto companies, amid repeated reports of businesses struggling to access banking.
The group’s co-chairs, Labour MP Gurinder Singh Josan and Conservative peer Lord Ed Vaizey, said limited access to banking could also undermine the UK’s planned regulatory framework for digital assets.
Lawmakers seek answers from banks
The APPG asked banks and banking service providers about their policies toward UK crypto and digital asset firms, restrictions on crypto-related payments and the factors that influence those decisions.
The lawmakers specifically asked whether banks provide accounts to crypto businesses, what limits they impose on transactions and whether their policies could change once the UK’s new crypto regime comes into force.
The inquiry covers a broad range of digital asset businesses, including exchanges, custodians, payment firms, wallet providers, tokenization companies and stablecoin issuers.
The APPG said it has heard of repeated cases in which crypto firms have struggled to open bank accounts. It also cited reports of restrictions on crypto-related payments and transactions. “Access to banking services could be one of the single biggest barriers to growth for UK crypto and digital asset businesses,” the lawmakers said in the letter.
Banks cite fraud and consumer risks
UK banks have defended restrictions on crypto-related payments by pointing to fraud risks and the potential losses consumers can suffer from volatile digital assets.
HSBC, NatWest, Monzo and Nationwide have limits on how much customers can transfer to crypto exchanges, with monthly limits ranging from £5,000 to £10,000, according to the Financial Times. Starling and Chase UK have imposed broader bans on such transfers.
The restrictions come as UK authorities seek to balance consumer protection with plans to establish the country as a major digital asset hub.
Crypto investments are not protected by the Financial Services Compensation Scheme, which provides protection for eligible savings and investments up to £120,000 per person, per financial services company.
New crypto rules add pressure
The banking debate comes as the UK prepares to introduce a comprehensive regulatory framework for crypto and digital assets.
The Financial Conduct Authority is expected to oversee regulated crypto activity under the new regime, while the government seeks to strengthen consumer protections and support the country’s position as a digital asset hub.
The FCA is also exploring rules for tokenized gold, including its potential use as collateral in wholesale markets, as part of the UK’s wider push to digitize financial markets.
The UK is preparing to introduce its new crypto regulatory framework, which is expected to take effect on October 25, 2027. The rules include lower capital requirements for stablecoin issuers, with the minimum requirement reduced from the proposed 2% to 1% of the total value of tokens issued.
The APPG said banks should consider the individual risk profile of businesses rather than automatically restricting services because of their involvement in crypto.
Economic Secretary to the Treasury Lucy Rigby has previously told Parliament that the government would not expect FCA-licensed crypto firms to face banking restrictions simply because of the sector in which they operate.
Inquiry to continue
The APPG launched an inquiry last month to assess crypto firms’ access to bank accounts and restrictions on crypto-related payments. It is also examining how these measures affect consumers, competition, innovation and investment, while considering ways to improve banking access without weakening safeguards against fraud and financial crime.
The group is seeking evidence from banks and other stakeholders through the end of August. It plans to publish a report containing its findings and recommendations after the inquiry concludes.
The outcome could help determine whether UK banks become more willing to serve regulated crypto businesses as the country moves toward its new regulatory framework, or whether concerns over fraud and consumer protection continue to limit access to traditional banking.
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