Key Takeaways
- • UK lawmakers have launched a formal parliamentary inquiry into banking barriers facing crypto firms, led by a cross-party group co-chaired by Lord Vaizey (former digital economy minister) and Labour MP Gurinder Singh Josan, examining whether banks' restrictions undermine the Government's ambition to position the UK as a global leader in digital assets.
- • Research by the UK Cryptoasset Business Council found that 40-50% of crypto firms were denied bank accounts or had existing accounts closed, with banks blocking or delaying an estimated 40% of attempted transfers to crypto exchanges, citing fraud and compliance concerns.
- • Major UK banks including HSBC, Nationwide, NatWest, Santander, and Starling Bank have imposed payment restrictions and account limitations on crypto-related transactions, with 70% of surveyed exchanges reporting that these barriers are hurting investment, expansion, and hiring in the UK.
- • The inquiry is examining whether banking restrictions are "proportionate" and assessing their impact on consumer access, competition, innovation, and the viability of crypto businesses seeking authorization under the UK's newly finalized crypto regulatory framework.
- • Industry bodies and legal experts have warned that the combination of banking barriers and new regulatory standards creates significant risk for crypto firms seeking authorization, potentially hampering the sector's growth and causing the UK to lose competitive ground to rival fintech and crypto hubs.
Summary
A cross-party group of UK lawmakers has launched a formal parliamentary inquiry into the banking access crisis affecting the country's cryptocurrency industry. The Crypto and Digital Assets All-Party Parliamentary Group (APPG), co-chaired by Lord Vaizey of Didcot, a former digital economy minister, and Labour MP Gurinder Singh Josan, is investigating why UK banks continue to refuse accounts and restrict payments for crypto firms—a problem that has plagued the sector for years. The inquiry examines not only account access but also related banking services including insurance, transfer limits, and payment blocks.
The timing is significant: the inquiry launches just weeks after the UK finalized its new crypto regulatory framework, creating a critical test of whether banking barriers could undermine the Government's strategic objective to establish the country as a global leader in digital assets. According to research published by the UK Cryptoasset Business Council in January 2026, the problem is extensive. The council found that approximately 40-50% of crypto firms were either denied bank accounts or had existing accounts closed by major UK banks, while banks were blocking or delaying an estimated 40% of all attempted transfers to crypto exchanges. Among surveyed exchanges, 70% reported that banking restrictions are actively hurting investment, expansion, and hiring in the UK.
Major UK financial institutions implicated in these restrictions include HSBC, Nationwide, NatWest, Santander, and Starling Bank. Banks have justified their positions citing fraud prevention, money laundering concerns, and compliance policies—concerns rooted in the perceived risks associated with digital currencies and their potential use in scams and illicit activities. However, lawmakers and industry bodies argue that these barriers are unnecessarily broad and may be disproportionate to actual risk, particularly as the regulatory environment tightens.
The parliamentary inquiry will assess whether banking restrictions are proportionate and examine their cumulative impact on consumer access, market competition, and innovation. Industry experts have flagged a compounding risk: the new regulatory standards require crypto firms to demonstrate capital adequacy and resilience to market shocks, but without access to banking services, legitimate firms struggle to meet authorization requirements. Thomas Cattee, a partner at Gherson Solicitors, warned that "there is a very high risk of failure for crypto firms applying for authorisation." This double barrier—banking denial coupled with regulatory requirements—risks creating a scenario where UK crypto firms relocate to more welcoming jurisdictions, undermining the Government's digital assets strategy and ceding competitive advantage to rival fintech and crypto hubs.
The timing is significant: the inquiry launches just weeks after the UK finalized its new crypto regulatory framework, creating a critical test of whether banking barriers could undermine the Government's strategic objective to establish the country as a global leader in digital assets. According to research published by the UK Cryptoasset Business Council in January 2026, the problem is extensive. The council found that approximately 40-50% of crypto firms were either denied bank accounts or had existing accounts closed by major UK banks, while banks were blocking or delaying an estimated 40% of all attempted transfers to crypto exchanges. Among surveyed exchanges, 70% reported that banking restrictions are actively hurting investment, expansion, and hiring in the UK.
Major UK financial institutions implicated in these restrictions include HSBC, Nationwide, NatWest, Santander, and Starling Bank. Banks have justified their positions citing fraud prevention, money laundering concerns, and compliance policies—concerns rooted in the perceived risks associated with digital currencies and their potential use in scams and illicit activities. However, lawmakers and industry bodies argue that these barriers are unnecessarily broad and may be disproportionate to actual risk, particularly as the regulatory environment tightens.
The parliamentary inquiry will assess whether banking restrictions are proportionate and examine their cumulative impact on consumer access, market competition, and innovation. Industry experts have flagged a compounding risk: the new regulatory standards require crypto firms to demonstrate capital adequacy and resilience to market shocks, but without access to banking services, legitimate firms struggle to meet authorization requirements. Thomas Cattee, a partner at Gherson Solicitors, warned that "there is a very high risk of failure for crypto firms applying for authorisation." This double barrier—banking denial coupled with regulatory requirements—risks creating a scenario where UK crypto firms relocate to more welcoming jurisdictions, undermining the Government's digital assets strategy and ceding competitive advantage to rival fintech and crypto hubs.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.