Banks from traditional finance in the United Kingdom (UK) have hardened their policies related to the cryptocurrency market. Some banks have reportedly closed accounts that interacted with centralized exchanges or are from crypto-related companies.
A report published by Recap on October 19 uncovered that 38% of crypto investors within the UK have switched banks. This migration mostly occurred in response to stricter cryptocurrency policies.
“Overall, the results found that 38% of investors have changed banks due to cryptocurrency policies. Of the remaining respondents, 22% have also strongly considered it. One respondent claimed to have their entire bank account blocked, including all cards and mobile banking facilities, because of a large amount of money that came in through cryptocurrency – others switched exchanges to ones more supported by banks.”
— Dan Howitt, for Recap
The report highlights that a global crackdown on the crypto industry has initiated these rigorous banking measures. Primarily due to concerns over high-risk investments, fraud, and money laundering.
“Since the collapse of FTX, one of the biggest crypto trading venues, many banks have taken extra precautions to protect their customers.”
— Dan Howitt, for Recap
Notably, banking policies in 2023 allegedly included: Blocking transactions to and from centralized exchanges, limiting investment amounts, and closing customer accounts who are actively trading digital assets.
Such measures have led to a growing agitation amongst part of the crypto community. Which led to nearly two in five enthusiasts changing their banking providers as a result.
“Cryptocurrency is often seen as an avenue for financial freedom, but when your money is deposited into a bank – the bank owns it.”
— Dan Howitt, for Recap
Increased demand for crypto-friendly banking services
This trend signals an increasing demand for more crypto-friendly banking services. Additionally, this trend comes amidst an era where ardent cryptocurrency users are seeking out such flexibility.
Banks that emerge as more accommodating and flexible towards cryptocurrencies could find a growing market for their service. Interestingly, Recap reported that Revolut carved the first position “as the best fintech for crypto holders in the UK.”
“Not only do users benefit from a seemingly unlimited exchange limit, but the global neobank is also the only one that permits users to trade through mobile banking apps. Revolut customers also benefit from a ‘Crypto Learn and Earn’ scheme.”
— Dan Howitt, for Recap
In the list, there are also Monzo, Nationwide, First Direct, Royal Bank of Scotland, HSBC, Natwest, Capital One, Starling Bank, Halifax, TSB Bank, Santander, and Barclays.
While each has its policies regarding cryptocurrency, the consensus is that they provide a more receptive environment for digital asset transactions, varied trading, and investment. Which is commended by crypto investors.
The quest for more crypto-friendly banks is causing a reshuffle in the UK financial ecosystem. A trend worth monitoring for its potential impacts on the financial landscape.
