The Crypto and Digital Assets All-Party Parliamentary Group (APPG), a cross-party panel in the UK Parliament, has asked the chief executives of all major UK banks to clarify their positions on providing services to crypto and digital asset firms.
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AAPLLetter to Banks Raises Six Key Questions
Labour MP Gurinder Singh Josan and Lord Vaizey of Didcot, a former digital economy minister and current peer, co-chair the APPG. They addressed a letter to every major banking leader on Tuesday, directly querying them on banking access for those in the digital assets sector. This move follows ongoing industry reports that many crypto companies find it difficult to open or maintain accounts with traditional financial institutions in the UK.
In their letter, Josan and Vaizey highlighted the regularity with which crypto and digital asset businesses report banking restrictions. Several UK banks, they stated, have imposed new limits on crypto-related activities, including payments and transfers, affecting the growth prospects of the country’s crypto sector.
Access to banking services could be one of the single biggest barriers to growth for UK crypto and digital asset businesses, and could potentially undermine the success of the UK’s forthcoming crypto regime. Limited access could influence where firms decide to invest.
The letter requests clarity on six points: each bank’s current policy on crypto clients; whether it serves crypto firms and, if not, its reasons; transaction limits; driving factors behind its approach; impact of the upcoming Financial Conduct Authority (FCA) regime; and potential steps by the government or regulators to address any remaining barriers.
Josan and Vaizey acknowledged the banks’ obligations to prevent financial crime and ensure consumer protection. However, they also argued that decisions should be based on a company’s specific risk profile, rather than industry-wide assumptions. Vaizey described these challenges as unnecessary friction for those seeking to set up a business in the UK.
Restrictions and Regulatory Changes
Major UK banks including HSBC, Nationwide, NatWest, Santander, and Starling have imposed significant restrictions on crypto-related transfers in recent years. Research from the UK Cryptoasset Business Council in January reported that banks blocked or delayed around 40% of attempted transfers to cryptocurrency exchanges.
According to reporting from the Financial Times, some banks such as HSBC, NatWest, Monzo, and Nationwide have set monthly transfer caps to crypto exchanges between £5,000 and £10,000. Meanwhile, Starling and Chase UK prohibit these transactions entirely. Financial Services Compensation Scheme protections do not cover crypto losses, increasing the risks for retail consumers.
Banks commonly cite the growing number of crypto-related scams and the high volatility of digital assets as grounds for these restrictions. The Financial Conduct Authority finalized its new regulatory framework for the cryptocurrency sector in June, with rules set to become mandatory in October 2027.
| Bank | Transfer Limit to Crypto Exchanges | Policy |
|---|---|---|
| HSBC, NatWest, Monzo, Nationwide | £5,000-£10,000/month | Limited transfers |
| Starling, Chase UK | £0 (prohibited) | Transfers barred |
HM Treasury, responsible for overseeing the UK’s public finances, has recognized the need for greater banking access for FCA-authorized crypto firms. In March, Economic Secretary Lucy Rigby stated in Parliament that the government does not expect banks to restrict services to FCA-licensed firms solely based on their participation in the crypto sector.
The APPG’s letters follow the group’s formal inquiry into banking access, which launched on July 21. The inquiry is accepting written evidence until August 31, with findings to be presented to the government. The co-chairs have clarified that this outreach to banks is intended to gather information and does not pre-judge the parliamentary inquiry’s outcome.
International Context and Industry Response
The banking difficulties facing UK crypto firms mirror those seen in other jurisdictions. In the United States, some companies have attributed loss of banking access to what they label Operation Chokepoint 2.0, a campaign they claim pressured banks to sever ties with the crypto sector.
Kraken, a major global cryptocurrency exchange, successfully obtained a $22 million settlement from an auditor it accused of abandoning it during such a period of restrictions.
Mini dictionary: Operation Chokepoint 2.0, a term used by crypto advocates, refers to an alleged coordinated effort by regulators or authorities to restrict banking services for the digital asset sector by pressuring financial institutions.
