UK Parliament turns up the heat on banks over crypto account access
UK lawmakers are pressing major banks to explain why crypto firms and crypto-related payments are still being capped, blocked, or treated like a problem they would rather not touch, even as the country prepares a full crypto authorization regime for 2027.
- Parliament wants answers on account access and payment limits.
- Banks say they are managing fraud risk, not picking a fight with crypto.
- The UK’s full crypto regime lands in 2027, but banking access may still be the real bottleneck.
The Crypto and Digital Assets All-Party Parliamentary Group, or APPG, said Tuesday that its co-chairs had written to senior bank executives as part of an inquiry into how British banks treat crypto businesses and crypto-related payments. The co-chairs are Labour MP Gurinder Singh Josan and Lord Vaizey of Didcot.
The timing is hard to miss. The Financial Conduct Authority has already set out the UK’s final crypto framework, with firms able to apply for authorization from Sept. 30, 2026 until Feb. 28, 2027. The regime is expected to become mandatory on Oct. 25, 2027.
That puts the UK on the path from patchy oversight to a fuller regulatory system. But a clean rulebook means very little if companies still cannot get a bank account, run payroll, or move money like a normal business.
That is the heart of the APPG inquiry, whether banks are over-restricting legitimate crypto firms and making it harder to build in Britain than it needs to be.
Josan and Vaizey said access to banking services could be “one of the single biggest barriers to growth for UK crypto and digital asset businesses.” Lord Vaizey told the Financial Times the current difficulties are “an unnecessary piece of friction.”
The APPG is asking banks some straightforward questions. Do they currently offer accounts to crypto firms? If not, why not? What limits do they place on crypto-related payments? What factors shape those policies? Would future UK crypto rules change their approach? And what could government or regulators do to help banks serve legitimate businesses without opening the door to fraud and abuse?
That last part is where things get messy. Banks are not pulling this out of thin air. Crypto still attracts scams, dodgy counterparties, and compliance headaches, and banks have to worry about fraud, sanctions, and anti-money-laundering rules. Nobody sensible wants a bank turned into a laundromat for scammers.
But there is a difference between risk management and blunt de-risking. If a bank treats the whole sector as too much trouble by default, legitimate companies get punished for crimes they did not commit.
According to the Financial Times, HSBC, NatWest, Monzo and Nationwide have placed monthly limits on transfers to crypto platforms, ranging from £5, 000 to £10, 000 depending on the bank. Starling and Chase UK have reportedly prohibited such payments altogether.
The UK Cryptoasset Business Council estimated in January that banks were blocking or delaying about 40% of attempted transfers to cryptocurrency exchanges. That figure is an industry estimate, not a universal market measure, but it does show how much friction firms say they are dealing with.
The government’s own position suggests this should not be the norm once the new regime is in place. Lucy Rigby, the Economic Secretary, told Parliament in March that once the framework is operational, the government “would not expect” FCA-authorized crypto firms to face bank restrictions “simply because of the sector they belong to.”
That is the tension in plain English. The state is building a formal system, but parts of the banking sector still seem to think “crypto” is enough of a reason to slam the brakes.
The FCA framework also matters because it is broader than the old anti-money-laundering registration system. The new regime covers trading platforms, custodians, intermediaries, stablecoin issuers and firms involved in regulated staking activities. Existing AML registrations will not automatically convert into FCA authorization.
For readers less familiar with the jargon, that distinction matters. AML registration means a firm has met specific anti-money-laundering requirements. FCA authorization is the fuller approval needed to carry out regulated crypto activities under the new rules. One is a narrower compliance check. The other is the proper license to operate in the new framework.
The FCA has been careful not to pretend regulation will erase every risk. It wants more certainty for firms, but it also says crypto remains risky and consumer harm is still a real concern. Fair enough. Rules can make the market clearer, but they cannot magically delete scams, bad decisions, or the occasional disaster from a Telegram group with delusions of grandeur.
Still, the point of bringing crypto deeper into the formal system is obvious. If firms meet the rules, they should be able to function as businesses. That means accounts, transfers, payroll, supplier payments, custody operations, and fiat on- and off-ramps that actually work.
Without that plumbing, the UK could end up with a polished rulebook and a clogged financial system. Great on paper. Useless in practice.
That is why this inquiry matters beyond Westminster theater. If the UK wants to attract talent, exchanges, custody firms, stablecoin issuers and fintechs building on digital assets, then the law and the banking rails need to line up. Otherwise, companies will simply build somewhere else.
To be fair to banks, their caution has a business logic. They face fines, reputational damage and regulatory scrutiny if they get AML or fraud risk wrong. From their point of view, crypto can look like a compliance minefield wrapped in customer complaints. That does not make blanket restrictions right, but it does explain why some institutions would rather shut the door than make a nuanced call.
The UK Parliament probes banks over restrictions on crypto inquiry is now taking written submissions from banking, payments, fintech and crypto companies, and the group plans to publish a report with findings and recommendations for the government after reviewing the evidence. If that report shows banks are still imposing sector-wide barriers even as the UK moves toward full authorization, pressure will grow for clearer guidance or harder expectations from regulators and ministers.
For now, the message is simple: regulation is only half the job. If the UK wants crypto firms to build there, the banking system cannot keep acting like a locked side entrance.
Key questions and takeaways
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Why are UK lawmakers questioning banks now?
Because the UK is building a formal crypto regime, yet many firms still face blocked or limited access to banking services. Lawmakers want to know whether banks are over-restricting legitimate businesses before the new rules take effect in 2027. -
What are banks saying in their defense?
Banks say they need to protect customers and the financial system from fraud, scams, sanctions breaches and money laundering. From their side, crypto often looks like a high-risk sector that demands tighter controls. -
What did the Financial Times report about bank policies?
According to the Financial Times, HSBC, NatWest, Monzo and Nationwide have monthly limits of £5, 000 to £10, 000 on transfers to crypto platforms, while Starling and Chase UK reportedly prohibit such payments altogether. -
Will the new UK crypto regime automatically fix banking access?
No. FCA authorization should make firms easier to assess, but it will not force banks to stop every restriction on its own. Banks may still tighten controls unless regulators set clearer expectations for dealing with authorized firms. -
What is the APPG?
The All-party parliamentary group is a cross-party group of UK lawmakers looking at issues affecting crypto and digital assets. In this case, it is leading the push for answers on banking access. -
Why does banking access matter so much for crypto firms?
Crypto businesses need bank accounts to pay staff, settle invoices, move customer funds and connect to the wider economy. Without those rails, even a fully compliant firm can be dead on arrival.
UK Parliament questions major banks over crypto account
