Recently, traditional banks in the United Kingdom have toughened their policies towards cryptocurrencies. It’s known that some banks have closed accounts that interacted with centralized cryptocurrency exchanges or received funds from cryptocurrency-related companies. A report published by Recap provides a clearer picture of the situation.
Bank Migration of Cryptocurrency Investors
According to a report released by Recap on October 19, 38% of cryptocurrency investors in the UK have changed their banks. This migration largely occurred in response to stricter cryptocurrency policies. Dan Howitt, a founding partner of Recap, commented on the findings, “Overall, the results reveal that 38% of investors have changed their banks due to the applied cryptocurrency policies. A further 22% of the remaining participants have definitely considered it. One participant claimed that all bank accounts, including all cards and mobile banking facilities, were blocked due to a large amount of money received through cryptocurrency. Others have switched cryptocurrency exchanges to those more supported by banks.”
The report indicates that the global pressure on the cryptocurrency market has led to strict controls and measures in the banking sector. Main concerns include high-risk investments, fraud, and concerns related to money laundering. Howitt stated, “Since the collapse of FTX, one of the largest cryptocurrency exchanges, many banks have taken extra measures to protect their customers.”
Traditional Banks Close Accounts Linked to Cryptocurrencies
Especially since the beginning of the year, banks in the UK have started taking measures like blocking transactions to centralized cryptocurrency exchanges, limiting investment amounts, and actively closing accounts of customers engaged in cryptocurrency trading. Such measures have caused problems for some participants in the cryptocurrency market. Data shows that nearly two out of every five cryptocurrency enthusiasts changed their banking provider. According to Howitt, cryptocurrencies are generally seen as a path to financial freedom, but when the money earned is deposited into a bank, the bank becomes the owner of that money.
This trend among banks in the UK points to an increasing demand for more crypto-friendly banking services. This trend emerges during a period when passionate cryptocurrency investors are looking for such flexibility. Banks that claim to offer compatibility and flexibility towards cryptocurrencies have an opportunity to find a growing market for their services. Interestingly, in the Recap report, Howitt highlighted that Revolut ranks first as the best fintech for cryptocurrency holders in the UK. He stated:
“Revolut not only offers its users an apparently unlimited exchange limit but is also the only global neobank allowing users to trade via their mobile banking apps. Revolut customers also benefit from the ‘Crypto Learn and Earn’ program.”
The list also includes Monzo, Nationwide, First Direct, Royal Bank of Scotland, HSBC, Natwest, Capital One, Starling Bank, Halifax, TSB Bank, Santander, and Barclays.
Although every traditional bank has policies related to cryptocurrencies, the consensus is that they provide a more open environment for various trading and investments. This is appreciated by cryptocurrency investors. The search for more crypto-friendly banks is causing a shift in the UK’s financial ecosystem. This is a trend worth watching in terms of its potential impact on the financial outlook.
