70% of the exchanges surveyed in the jurisdiction say bank restrictions are undermining their willingness to expand, invest, and hire.
The UK crypto industry is experiencing increased friction with the country’s banking sector. A new survey of crypto platforms operating in the country found that nearly 40% of all transactions are blocked or delayed by banks.
The UK’s banking sector is allegedly “debanking” crypto platforms operating in the jurisdiction. A recent survey by the UK Cryptoasset Business Council (UKCBC) revealed that nearly 40% of all transactions to crypto exchanges are blocked or delayed by banks, causing inconvenience and customer friction.
Debanking concerns on crypto platforms in the UK intensify, survey shows
The report named “Locked Out: Debanking the UK’s Digital Asset Economy” noted that the “debanking” trend is worsening amid the implementation of new restrictions. According to the survey report, the “action by UK banks is incompatible with the City Minister’s recent statement of the UK government’s plans to make the ‘UK at the top of the list for cryptoassets firms looking to grow.'”
The UKCBC surveyed ten of the largest crypto exchange platforms in the UK, including Coinbase, Uphold, Kraken, Zumo, Wirex, OKX, Luno, Bitpanda, Xapo Bank, and Gemini. These exchanges offer crypto services to millions of UK citizens and have processed hundreds of billions of pounds in transactions.
One crypto exchange said it had experienced a decline in transactions worth £1 billion ($1.2 billion) over the past year due to bank-side rejections of card payments and bank transfers in the UK alone.
The survey found that 80% of exchanges reported an increase in customer friction due to blocked, delayed, or limited transfers over the past 12 months. Only two exchanges reported no changes, while one reported an increase.
The survey also found that 70% of UK crypto exchanges described the prevailing UK banking environment for crypto enterprises as deteriorating into greater hostility. All exchanges said that banks do not provide clear reasons for blocking transactions or restricting accounts.
The report also highlighted that Wise and Revolut, leading international money transfer platforms, have entered the crypto space, yet they also block, delay, and limit transactions to other crypto platforms.
The UKCBC reported that the debanking challenge is undermining domestic innovation and driving competition overseas. Countries like the U.S. have initiated processes of streamlining the clarity of crypto assets, a move that is set to merge traditional finance with decentralized assets.
UKCBC gives recommendations to solve UK bank-crypto friction
The UKCBC gave several recommendations to improve the UK’s financial ecosystem by bridging crypto exchanges with the traditional banking sector. The council recommended that the FCA require banks to establish a risk-based framework that recognizes the diversity of centralized exchanges and encourages close interactions between banks and legislators.
The council also urged the FCA and the UK government to encourage banks to move away from treating all retail crypto users as equally “high risk.” The council’s report also recommended that the FCA mandate banks to remove unnecessary frictions for exchanges registered under the FCA and promote anti-competitive practices.
The UKCBC also advised the UK government to create a forum for regular engagement among regulators, banks, and crypto exchanges to tackle issues such as fraud and other criminal activities.
The news comes after Cryptopolitan reported on January 26 that the UK’s biggest banks will raise profit targets in the near future, after recording strong earnings. The publication noted that rising interest rates and cost-control measures are driving better-than-expected performance.
Sources familiar with the matter revealed that NatWest intends to boost its 2027 projection from the current 15% to possibly 17%. The analysts also predicted that Barclays and HSBC could raise their targets by up to 200 basis points after outlining their strategies for the following years.
European banking shares have risen dramatically after years of low profitability since the financial crisis. The sector’s valuation has more than doubled since early 2024 and risen 60% in the last year, casting a shadow over U.S. banks.
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