UK banks are showing resistance to crypto firms
United Kingdom crypto companies are facing resistance from banks, which is making it difficult for them to park their customers’ assets. The crypto industry needs banking partners to accept dollar deposits in return for services or in exchange for tokens, pay their employees or vendors, and operate effectively.
However, banks have been reluctant to work with crypto companies, and the collapse of crypto-friendly banks like Silvergate and Signature has left the industry scrambling to find anyone willing to work with them. In addition to resistance from banks, UK crypto companies are also facing regulatory challenges.
From March 31, 2023, firms operating crypto services in the UK must be registered with the Financial Conduct Authority (FCA) . The FCA has taken a tough stance on crypto regulation, and many crypto companies have withdrawn their applications as they were not meeting the required anti-money laundering standards.
Several companies, including Revolut and Copper, could soon be forced to wind down their crypto activities in Britain if they fail to obtain full authorization. The banking industry is racing to catch up with the crypto industry and profit from it. Banks are experimenting with cryptocurrency offerings and lobbying regulators to create rules that work in their favor.
However, their initial skepticism has cost them time, and an alternative financial world is springing up around the traditional banking industry.
What is the reason behind UK banks’ resistance to crypto firms
ccording to various sources, UK banks are limiting their interaction with the crypto sector altogether, making it difficult for crypto companies to obtain banking services.
The few banks still working with crypto firms are requesting more documentation and information about how they monitor clients’ transactions. The collapse of crypto-friendly banks like Silvergate and Signature Bank has left the industry scrambling to find anyone willing to work with them.
The crypto industry needs banking to accept dollar deposits in return for services or in exchange for tokens, pay their employees or vendors, and build a parallel financial system free of intermediaries. However, the trend of fewer banks accepting crypto has been dubbed “Operation Chokepoint” by some.
How are crypto firms affected by the banking crisis
Crypto firms in the United Kingdom are facing difficulties accessing banking services, according to multiple sources. Many UK banks are limiting their interaction with the crypto sector altogether, and the few banks still working with crypto firms are requesting more documentation and information about how they monitor clients’ transactions.
Some banks have even suspended the accounts of crypto firms. The situation has become direr over the last several weeks, and crypto firms have voiced their concerns to the administration of Prime Minister Rishi Sunak. The UK’s crypto banking problem has been created because numerous banks are limiting their interaction with the sector altogether. U.K. banks have been pulling away from crypto in recent years.
The few banks still dealing with cryptocurrency businesses have requested further paperwork and information about how they monitor their customers’ transactions. The situation has become so dire that UK crypto companies are calling for help to break a banking barrier. The trend of banks limiting their interaction with the crypto sector has been dubbed “Operation Chokepoint”.
This trend is not unique to the UK, as US crypto clients have also had to look for new banking partners following the collapse of the US’s Silicon Valley, Silvergate, and Signature banks.
Are there any UK banks that are still accepting crypto firms as clients
there are few banks still working with crypto firms in the UK, but they are requesting more documentation and information about how they monitor clients’ transactions.
However, many UK banks are limiting their interaction with the crypto sector altogether, making it difficult for crypto companies to obtain banking services.
A spokesperson for NatWest said the bank does not “currently offer banking facilities to businesses [that] buy or sell cryptocurrencies”.
The collapse of crypto-friendly banks like Silvergate and Signature Bank has left the industry scrambling to find anyone willing to work with them.
Therefore, while there may be a few banks still accepting crypto firms as clients, the trend is towards fewer banks accepting crypto, causing difficulties for crypto firms in accessing banking services.
