UK Lawmakers Probe Banks Over Crypto Payment Restrictions

Key Insights

• Crypto News inquiry examined banking access barriers facing UK digital asset firms.
• Lawmakers sought evidence on blocked transfers, limits, and account closures.
• Written submissions remained open until Aug. 31, 2026.

The UK Crypto and Digital Assets All-Party Parliamentary Group opened a banking inquiry on July 21, 2026. The review examined account access and crypto payments restrictions affecting businesses and consumers.

The inquiry came as Britain prepared to implement broader crypto regulations. Lawmakers sought evidence on whether banking controls remained proportionate to fraud and financial crime risks.

The parliamentary group requested evidence from banks, payment providers, fintech companies, crypto firms, academics, and consumer organizations. Submissions remained open for six weeks, ending Aug. 31.

The APPG said some businesses had struggled to open or retain bank accounts. Other firms reported problems accessing merchant services, payment systems, insurance, and related professional support.

Lawmakers also examined controls placed on crypto payments. Reported measures covered blocked transfers to selected platforms and limits on customer transactions.

The inquiry asked how banks applied those restrictions and assessed related risks. It also examined effects on consumers, investment, competition, innovation, and business operations.

Lord Vaizey of Didcot said firms had repeatedly raised banking access concerns. He co-chaired the APPG alongside Labour MP Gurinder Singh Josan.

The group’s call for evidence requested practical examples and supporting documentation. It also sought views on legal, regulatory, commercial, and operational causes behind restricted access.

UK Parliament describes All-Party Parliamentary Groups as informal, cross-party bodies. They lack official parliamentary status and cannot pass legislation or issue binding regulatory orders.

The APPG could still influence policy through its final recommendations. Government departments, regulators, and parliamentary committees may consider those findings during future reviews.

The group said it would assess submissions before publishing its report. However, it provided no publication date for the final findings.

Its work followed an earlier 2022–2023 inquiry into Britain’s crypto policy. That review identified banking access among barriers reported by digital asset businesses.

The current process widened the evidence base beyond the crypto industry. Banks and payment providers could explain compliance controls, customer-risk assessments, and transaction policies.

That balance mattered because account closures involve separate legal and commercial questions. Banking providers retain risk-management responsibilities under anti-money laundering and fraud rules.

The Financial Conduct Authority reviewed payment-account access and closures in 2023. Its report specifically examined problems reported by cryptoasset businesses and payment companies.

The inquiry arrived after the government established a formal regulatory regime for certain crypto activities. The Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 became law in February.

HM Treasury said the framework would take effect in October 2027. Firms conducting covered activities would require Financial Conduct Authority authorization after implementation.

That timeline strengthened the APPG’s case for reviewing banking access before authorization requirements began. Regulated firms still require accounts to receive funds, pay workers, and settle supplier obligations.

The inquiry also examined international responses to crypto-related banking restrictions. Lawmakers requested examples where other jurisdictions had improved access while retaining safeguards.

Banks could argue that transaction controls protect customers from scams and unauthorized transfers. Crypto companies could counter that broad restrictions treat licensed and unlicensed businesses similarly.

The evidence will determine whether the APPG supports regulatory guidance, stronger communication, or revised banking practices. Any recommendation would still require action from government, regulators, or financial institutions.

The banking review formed part of a wider government focus on digital finance. UK authorities also advanced rules for stablecoins, tokenized payments, and digital securities.

The Bank of England and Financial Conduct Authority outlined their joint stablecoin approach in June 2026. The Financial Conduct Authority would oversee qualifying UK-issued stablecoins and their retail payment use.

The Bank of England would share oversight when HM Treasury classified an issuer as systemic. That structure separated ordinary market supervision from wider financial stability concerns.

Government policy also supported a combined framework for traditional and tokenized payment services. HM Treasury said the approach would cover stablecoins and tokenized deposits.

These crypto regulations could increase demand for formal banking relationships. Authorized firms would rely on banking infrastructure for customer funds, payroll, taxation, and operating expenses.

However, the inquiry itself will not compel banks to serve particular companies. Its findings could instead shape how institutions document and apply risk-based decisions.

This article is for informational purposes only and does not constitute legal, regulatory, or financial advice. The parliamentary inquiry remains ongoing, and any recommendations may change before the UK government or regulators take further action.

Stakeholders had until Aug. 31, 2026, to submit evidence. The APPG will then review responses and publish recommendations without a confirmed reporting date.

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