UK Banks Continue Bitcoin Restrictions, Policy Group Reports to Parliament

Bitcoin Policy UK criticized British banks for imposing blanket restrictions on legal bitcoin activities. In a recent announcement, the organization revealed that no improvements have occurred in the treatment of bitcoin by banks over the past three years. UK policy categorizes 'crypto' uniformly, causing bitcoin to be subject to regulations intended for unbacked tokens and issuer-dependent stablecoins. Since 2023, the British government has urged banks to evaluate cases individually rather than impose sector-wide restrictions, but the organization claims that practices have not changed, exacerbating the issue as the UK approaches the full implementation of its cryptoasset regime by 2027. Bitcoin Policy UK demanded that banks provide justifications for rejecting bitcoin-related transactions. Currently, approximately 40% of bank-to-exchange transfers in the UK are blocked or delayed. A joint survey indicated that half of the UK fintech and crypto firms surveyed had been denied a bank account or had one closed, with only 14% managing to open and maintain an account with one of the nine largest banks. Virgin Money, Metro Bank, Starling Bank, TSB, and Chase UK outright block transfers and card payments, while Barclays and HSBC limit transfers to 2500 GBP per transaction. Furthermore, 80% of exchanges reported increased restrictions over the past year, with no exchanges noting improvements. The submission to the parliamentary inquiry includes requests for regulatory clarity on bitcoin transactions, a duty for banks to provide specific reasons for restrictions, and a periodic measure of restriction levels.

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