40% of cryptocurrency investors in the United Kingdom (UK) said their banks blocked or delayed transactions to crypto platforms.
The result emerges from a survey conducted by IG Group and reported by CoinTelegraph. IG Group surveyed 500 active crypto users and 2,000 adults in the UK. One of the main findings is that, for many retail traders, access to digital assets and the UK crypto sector remains difficult, despite the legality of cryptocurrencies in the country.
"We are in a damaging situation where millions of people are effectively excluded from the crypto world just because of the bank they have an account with. This behaviour is at best anti-consumer, at worst anti-competitive - and does not have the support of the public," said Michael Healy, UK managing director of IG.
British Banks Impose Restrictions on Crypto Investors
About a third of respondents on whom banks imposed restrictions complained, while more than a third switched banks altogether.
Public opinion remains divided on whether banks should step in and restrict cryptocurrency-related transactions: 42% of UK adults who took part in the survey were against such restrictions, while around a third were in favour.
In the UK, it is legal for investors to trade cryptocurrencies, but there are several obstacles imposed by regulators and banks regarding how to transfer funds to the sector. Current regulations state that only companies registered with the Financial Conduct Authority (FCA)can offer sterling crypto services. In addition, retail traders cannot buy cryptocurrencies via credit cards or other forms of borrowed money.
High-Street Banks Impose Own Limits
Some UK banks have gone beyond these restrictions, introducing their own limits and justifying them with consumer protection and fraud risks.
Banks that have blocked cryptocurrency deposits and purchases include Chase UK, NatWest and others. Affected customers complain that they no longer have many options on how to fund their accounts with regulated exchanges.
Criticism of the UK's conservative stance, deemed ill-suited to compete on a global scale, has also come from former Chancellor of the Exchequer George Osborne, now an advisor to US exchange Coinbase. Osborne highlighted as an example the almost complete absence of stablecoins pegged to sterling.
Globally, stablecoins have a market capitalisation of almost $300 billion. By comparison, those pegged to sterling account for less than 0.001% of this total.
British Regulators Loosen Some Restrictions
As a partial concession, the British regulators have indicated that they will loosen some rules. The FCA had previously banned retail investors from accessing crypto exchange-traded notes (ETNs), but the ban will be lifted on 8 October. For some observers, however, this is only a small step: deeper reforms would be needed to really unlock the potential of the crypto industry in the UK.
It remains to be seen how far the FCA and UK regulators will be willing to go. For now, it is the banks that are the main obstacle, imposing restrictions that continue to limit investors.
