{"id":66310,"date":"2026-08-11T00:38:14","date_gmt":"2026-08-11T04:38:14","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/uk-lawmakers-warn-banking-refusal-threatens-digital-asset-growth\/66310\/"},"modified":"2026-08-11T00:38:14","modified_gmt":"2026-08-11T04:38:14","slug":"uk-lawmakers-warn-banking-refusal-threatens-digital-asset-growth","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/uk-lawmakers-warn-banking-refusal-threatens-digital-asset-growth\/66310\/","title":{"rendered":"UK Lawmakers Warn Banking &#8220;Refusal&#8221; Threatens Digital Asset Growth"},"content":{"rendered":"<h2>Key Takeaways<\/h2>\n<ul>\n<li><strong>Banking access is cited as the &quot;single biggest barrier&quot;<\/strong> to the growth of the UK&#39;s digital asset industry, according to a cross-party group of lawmakers.<\/li>\n<li><strong>Approximately 40% of domestic payments<\/strong> to crypto exchanges are currently blocked or delayed by British banks, with one platform reporting nearly <strong>\u00a31 billion in rejected transactions<\/strong> over the past year.<\/li>\n<li><strong>Major lenders including HSBC (<a href=\"\/stock\/HSBC\">HSBC<\/a>) and NatWest (<a href=\"\/stock\/NWG\">NWG<\/a>)<\/strong> face scrutiny for imposing monthly transfer limits between \u00a35,000 and \u00a310,000, while others like Chase UK maintain outright bans.<\/li>\n<li><strong>A formal parliamentary inquiry<\/strong> is underway to determine if these restrictions are proportionate to fraud risks or if they unfairly stifle the UK&#39;s ambition to become a global crypto hub.<\/li>\n<\/ul>\n<p>The UK&#39;s <strong>All-Party Parliamentary Group (APPG)<\/strong> on Crypto and Digital Assets has warned that the refusal of traditional banks to service cryptocurrency firms risks stunting the industry\u2019s growth. In a letter sent to the leaders of major British banks, co-chairs <strong>Lord Ed Vaizey<\/strong> and <strong>Gurinder Singh Josan<\/strong> described the lack of banking access as a critical piece of &quot;unnecessary friction&quot; for legitimate businesses.<\/p>\n<p>The lawmakers emphasized that these barriers could undermine the success of the UK&#39;s <strong>forthcoming crypto regulatory regime<\/strong>, which is set to begin implementation in <strong>October 2027<\/strong>. While the government has expressed a desire to position London as a global digital asset hub, the APPG argues that firms cannot scale if they are unable to perform basic functions like paying staff or securing insurance.<\/p>\n<h3>Systemic Barriers to Entry<\/h3>\n<p>Research from the <strong>UK Cryptoasset Business Council<\/strong> highlights the scale of the issue, revealing that <strong>70% of surveyed exchanges<\/strong> believe banking curbs have directly weakened their expansion plans in the UK. Many firms report being denied business accounts without explanation, forcing them to seek financial services in more crypto-friendly jurisdictions.<\/p>\n<p>Banks have defended their restrictive policies by citing the high risk of <strong>Authorized Push Payment (APP) fraud<\/strong> and the volatility of digital assets. Under current UK rules, banks can be held liable for up to <strong>\u00a385,000<\/strong> per customer for certain types of fraud, creating a significant financial incentive for lenders to block transactions they deem high-risk.<\/p>\n<h3>Regulatory Tensions<\/h3>\n<p>The friction comes as the <strong>Financial Conduct Authority (FCA)<\/strong> prepares to launch a comprehensive oversight framework. Starting in <strong>September 2026<\/strong>, firms will be able to apply for formal authorization under new rules that mandate <strong>capital requirements and annual stress tests<\/strong>.<\/p>\n<p>Lawmakers are now questioning whether the &quot;de-banking&quot; of crypto firms remains justified once these companies fall under the same rigorous supervision as traditional financial institutions. The APPG&#39;s inquiry is currently accepting evidence until the end of August 2026, with a final report and recommendations for the British government expected shortly thereafter.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways Banking access is cited as the &quot;single biggest barrier&quot; to the growth of the UK&#39;s digital asset industry, 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