UK Banks Put the Brakes on Crypto Cash Flow
The Rising Issue
In the UK, transferring money to crypto exchanges is becoming increasingly difficult. A recent study by the UK Cryptoasset Business Council (UKCBC) reveals that banks are frequently blocking, delaying, or refusing transactions between UK accounts and crypto platforms.
The Scale of the Problem
- 80% of exchanges reported a significant increase in customers facing these issues over the past year.
- 40% of transactions to crypto exchanges are either blocked or delayed by banks.
Blanket Policies and Lack of Transparency
The study, which gathered data from ten of the UK's largest exchanges, found that banks are applying blanket policies. They are not differentiating between regulated and higher-risk platforms. This lack of transparency is leaving both exchanges and customers in the dark.
Financial Impact
- One exchange reported 1 billion pounds in declined transactions over the past year.
- Customers are frustrated, and exchanges are struggling to grow or launch new products due to these restrictions.
Call for Change
The UKCBC argues that these practices are stifling innovation and driving competition overseas. They recommend that the government and financial regulators step in to make banks adopt more nuanced, risk-based approaches.
The Need for Dialogue
Simon Jennings, the executive director of the UKCBC, emphasizes the need for constructive dialogue. However, so far, banks have been reluctant to engage or share data on fraud levels. If the UK wants to lead in the global crypto race, this needs to change.
Broader Implications
The study highlights a broader issue: the tension between financial institutions and the rapidly evolving crypto industry. As crypto continues to gain mainstream attention, the need for clear, fair, and transparent banking practices becomes ever more critical.
