Cryptocurrency companies struggle to access banking services in the UK
Cryptocurrency companies have found it difficult to enter this market, due to the amount of documentation and information required
Cryptocurrency businesses face multiple difficulties in accessing banking services in the UK. According to various sources, the few banks that still work with cryptocurrencies are increasingly requesting more documentation and information on how they control their clients’ transactions.
Problems facing cryptocurrency companies include application rejections, account freezes, and paperwork overload. Companies have even taken their complaints to the government of Prime Minister Rishi Sunak, as the situation has worsened in recent weeks. This contradicts Sunak’s plans to prioritize the fintech revolution and make the UK a global center for cryptocurrencies.
According to Tom Duff-Gordon, Coinbase’s vice president of international policy, “the reaction of British banks has been sharper than that of the EU”. Efforts by the European Union to establish a framework for digital assets are making banks more receptive to crypto companies from other countries. The European parliamentary committee passed the Markets in Crypto Assets (MiCA) legislation in October 2022, almost two years after it was first introduced in September 2020. It is expected to be voted on this month.
Since the beginning of 2023, VC investment in digital asset companies would have fallen 94 % to $55m in the UK, according to PitchBook data, while in other countries in Europe it rose 31 %. Faced with this situation, cryptocurrency companies are turning to payment service providers such as BCB Payments and Stripe to maintain their business operations in the UK.
In early March, HSBC Holdings and the Nationwide Building Society banned cryptocurrency purchases via credit cards for retail customers, joining a growing list of banks in the country tightening restrictions on digital assets.
(Reference image source: file)
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