Cross-party MPs and members of the House of Lords in the UK have launched a parliamentary inquiry focusing on the ongoing barriers faced by domestic crypto and digital asset businesses in accessing banking services. The investigation will examine why these businesses struggle to open or maintain bank accounts, and why banks impose restrictions on crypto-related transactions.
The investigation was initiated close to the implementation of the new regulations.
This survey was initiated by the UK Parliament’s All-Party Parliamentary Group on Cryptoassets and Digital Assets. The group stated that, having just completed its new crypto regulatory framework, the UK now needs to assess whether restrictions at the banking level could undermine the government’s goal of positioning the UK as a global hub for digital assets.
The co-chairs of the group include former Minister for Digital Economy Lord Vaizey of Didcot and Labour MP Gurinder Singh Josan. Both stated that banking services are a fundamental requirement for any legitimate business, and unnecessary barriers could hinder growth, investment, and innovation.
The investigation covers accounts, insurance, and payment restrictions.
According to the disclosure, this investigation will not only examine issues related to account opening and maintenance but also cover ancillary financial services such as insurance. Additionally, the transfer limits, blocks, and delays on crypto-related payments imposed by several UK banks will also be assessed.
The investigation will further assess whether these measures are proportionate to the risks and what impact they have had on consumers, market competition, and industry innovation. The report notes that institutions such as HSBC, Nationwide, NatWest, Santander, and Starling Bank have previously imposed restrictions on crypto-related payments.
Industry data indicates that transfers are being blocked.
A study released in January by the UK Cryptoassets Business Committee found that UK banks intercepted or delayed approximately 40% of funds attempting to be transferred to cryptocurrency exchanges. Around 70% of the surveyed exchanges reported that these restrictions have impacted their investment, expansion, or hiring plans in the UK.
In fact, the all-party parliamentary group in the UK also raised similar concerns in its 2023 investigation. The conclusion at the time was that friction on the banking side could undermine the UK’s plans to establish itself as a hub for digital assets, and called for prompt action on these issues.
The Ministry of Finance had previously acknowledged the existence of the issue.
The UK Treasury has since acknowledged this issue, stating that regulated businesses should not be excluded from the banking system solely because they engage in cryptocurrency activities. In March of this year, Lucy Rigby, Parliamentary Secretary for Economic Affairs at the UK Treasury, told Parliament that under the new regulatory framework, the government does not expect crypto businesses authorized by the UK Financial Conduct Authority to be restricted by banking service providers solely due to their industry.
In addition to the UK’s domestic context, this survey will also examine how the United States, Hong Kong, Australia, and the European Union have addressed access to crypto banking, to inform UK policy. Similar controversies exist in these markets, highlighting that the relationship between crypto firms and traditional banks remains a practical challenge in regulatory implementation across multiple jurisdictions.