A new survey by the UK Cryptoasset Business Council (UKCBC) found that transfers between United Kingdom bank accounts and crypto exchanges are frequently blocked, delayed or refused, even when customers are trying to use regulated platforms.
โThe survey, titled Locked Out: Debanking the UKโs Digital Asset Economy, draws on responses from 10 of the UKโs largest centralized exchanges, which collectively serve millions of UK consumers and have processed hundreds of billions of pounds in transactions.ย
It aims to replace anecdotes with hard numbers on how current banking practices affect the sector. The UKCBC argues that widespread restrictions are a major obstacle to growth and are already undermining the UKโs ambitions to be a leading hub for digital assets.
Eight in 10 exchanges reported a noticeable increase over the past 12 months in customers experiencing blocked or limited transfers, with none seeing a decrease, the survey found.ย
โHow hard is it to move money?
Based on the exchangesโ data, UKCBC estimates that 40% of transactions to crypto exchanges are either blocked or delayed by the banks in question.ย
Simon Jennings, executive director of the UKCBC, told Cointelegraph, โWe acknowledge that fraud is a legitimate concern and we actively want to work towards a solution. However, there is a widespread concern within the industry that banks are using compliance posture as a proxy to hinder growth of the sector.โ
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One leading UKโfounded exchange observed close to 1 billion pounds ($1.4 billion) in declined UK transactions over the past year, attributable to bankโside rejections of card payments and openโbanking transfers.
The pattern spans a wide range of providers, with most major highโstreet banks now imposing strict limits or blocks on both bank transfers and card payments to exchanges, while several challengers allow payments but with tight caps or 30โday limits.ย
โBlanket policies and lack of transparency
The UKCBC stresses that almost all major UK banks and payment companies currently impose blanket transaction limits or complete blocks on crypto-asset exchanges, often without differentiating between Financial Conduct Authorityโregistered UK businesses and higherโrisk platforms.ย
Qualitative feedback from exchanges highlighted inconsistent restrictions โeven against FCAโregistered firms,โ driven by blanket policies rather than evidenceโbased risk assessment.
Jennings said that their engagement with UK exchanges showed that โpayment blocks or limits are applied universally,โ and that FCA registration โdoes not currently prevent these restrictions.โ
โThe report also flags a nearโtotal lack of transparency around these decisions, with 100% of surveyed exchanges saying banks provide no clear explanations for payment blocks or account restrictions, leaving companies and their customers โin the dark.โย
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One exchange quoted in the report said that 60% of its customers expressed anger at the resulting friction, while another described bankโimposed limits and bans as โthe single biggest problemโ with growing or launching new crypto products in the UK.
UKCBC recommendations
โFor UKCBC, the concern goes beyond consumer inconvenience. The report concludes that antiโcompetitive debanking practices are โundermining domestic innovation and driving competition overseas.โ
It recommends that the government and FCA make clear that blanket bans are unacceptable, require banks to adopt more granular, riskโbased frameworks that distinguish between different exchanges and remove unnecessary frictions for FCAโregistered firms.
Jennings said that โconstructive dialogueโ was the vital first step, but that so far, โbanks have not meaningfully engaged and have been unwilling to share data on fraud levels.โ He added, โIf the UK is going to lead the global race, this cannot continue.โ
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