UK Lawmakers Warn Banking Restrictions Could Hold Back Crypto Industry Growth

Highlights:

• UK lawmakers warn banking restrictions could slow crypto industry growth despite upcoming FCA regulation for digital assets.
• Crypto firms report difficulty opening bank accounts, while several banks also limit customer transfers to exchanges.
• The APPG is reviewing banking access and plans recommendations after its public inquiry closes on August 31.

UK lawmakers have warned that limited access to banking services could slow the growth of the country’s crypto and digital asset industry. They say crypto companies continue to face problems opening bank accounts and using basic financial services needed to run their businesses.

According to an August 11 Financial Times report, the co-chairs of the Crypto and Digital Assets All-Party Parliamentary Group (APPG) raised the issue in a letter sent to leaders of British banks. Lord Ed Vaizey and Labour MP Gurinder Singh Josan said poor banking access could become one of the biggest barriers facing UK crypto companies.

The lawmakers also warned that banking restrictions could weaken the impact of the UK’s upcoming crypto regulatory framework. Britain is preparing to bring a wider range of crypto activities under Financial Conduct Authority (FCA) supervision from October 25, 2027.

Banks’ refusal to take on crypto firms risks stunting UK industry’s growth, lawmakers say https://t.co/sRjLo8Dc6z

— Finance News (@ftfinancenews) August 11, 2026

UK Crypto Firms Face Problems Accessing Bank Services

Crypto companies have repeatedly complained about difficulties opening and keeping business bank accounts in the UK. Some firms have also struggled to access payment and merchant services needed to receive customer funds, pay employees and continue normal operations.

The APPG formally launched an inquiry into crypto banking access on July 21. The inquiry is examining whether legitimate digital asset companies face unnecessary banking barriers and how those restrictions affect investment, innovation and competition in the UK.

The Crypto & Digital Assets APPG has today launched a Parliamentary Inquiry into access to banking services for the UK's crypto and digital assets sector.

The APPG is Westminster's leading cross-party group on crypto and digital assets, co-chaired by Lord Vaizey of Didcot… pic.twitter.com/uk3x7caV3Z

— Crypto & Digital Assets APPG (@cryptoappg) July 21, 2026

Retail crypto users also face restrictions. According to the Financial Times, HSBC, NatWest, Monzo and Nationwide have introduced limits on how much customers can transfer to cryptocurrency exchanges. Those limits range from about £5,000 to £10,000 per month, depending on the bank. Meanwhile, Starling and Chase UK have blocked such transfers entirely.

However, banks say the measures are designed to protect customers. They point to crypto-related fraud, scams and sharp price swings as reasons for limiting payments to digital asset platforms. Crypto losses are also generally outside the protection offered by the UK’s Financial Services Compensation Scheme, adding another layer of risk for retail customers.

Banking Access Comes Ahead of New UK Crypto Rules

The debate comes as the UK moves toward a broader regulatory system for digital assets. The FCA published final rules and guidance on June 30, while the authorization application period for crypto firms is scheduled to begin on September 30, 2026. The full regime is expected to take effect on October 25, 2027.

Under the framework, firms carrying out covered crypto activities will need FCA authorization. The government hopes clearer rules will support investment while providing stronger protections for customers.

Meanwhile, the APPG is collecting evidence from banks, crypto companies, payment providers, regulators, consumer groups and other industry participants. Submissions remain open until August 31. After reviewing the evidence, the parliamentary group plans to publish a report with recommendations for the government.