Recently, a new problem has arisen for crypto companies as UK banks are declining crypto clients. As per Bloomberg reports, many crypto companies face difficulties accessing banking services in the UK. And the few banks still working with crypto exchanges are demanding more documentation and information about how crypto companies monitor their client’s transactions.
New challenge for crypto companies in the UK
Since the last few months, crypto companies have faced many challenges ranging from having application rejections, accounts frozen to being overwhelmed with paperwork. Crypto companies have even complained about this to the government of the newly elected Prime Minister, Rishi Sunak, as the situation has worsened in the past few weeks. It can be seen that Sunak’s plan to prioritise financial tech disruption and make the UK a global crypto hub is going the opposite way.
Recently, vice president of International Policy at Coinbase, Tom Duff-Gordon, told Bloomberg that the UK banking reaction has been more acute than the EU one. As per him, the European Union’s efforts to establish a digital asset framework make the banks more receptive to crypto firms in other countries. The European parliamentary committee passed the MiCa, also known as Markets in Crypto Assets, legalisation in Oct, nearly two years after it was first introduced in Sept 2020.
According to a report from PitchBoo, so far this year, venture capital investment in crypto companies reportedly dropped by 94 per cent to just 55 million in the UK, against a 31 per cent increase in other countries in Europe. Crypto companies are turning to payment service providers such as Stripe and BCB payments to maintain business operations in the UK. In simple words, the condition of crypto companies in the UK is very bad.
UK is trying to ban transactions with crypto companies
As you know, UK banks are declining crypto clients, creating a massive issue for crypto companies. Besides that, CryptoUK, the self-regulatory trade association, proposed the creation of a “white list” of registered firms in the UK to address banks limiting or banning transactions with digital asset companies.
CryptoUK also said many of the major UK banks have now put bans or restrictions, and we are concerned that other banks and PSPs may soon follow suit. They added that they believe the government action is now warranted.
What are your thoughts on the new problems for crypto companies as UK banks decline crypto clients? Do you think the UK government will do something soon to solve these issues? Let us know in the comments below. And if you found our content informative, share it with your family and friends.