UK crypto advocates take on banks over transfer blocks

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A United Kingdom digital asset advocacy group has launched a campaign against what it perceives as a concerted effort by the country’s banking sector to restrict transfers to cryptocurrency exchanges.

Stand With Crypto UK recently urged its 288,100 local members to challenge “blanket restrictions on transfers to crypto exchanges” by local banks, arguing that the apparent attempt to block crypto transfers is at odds with the government’s ambition to make the country a global leader in digital assets and Web3 innovation.

The organization, which describes itself as “a nonprofit advocating for clear, common-sense crypto regulations,” cited a recent report from the UK Cryptoassets Business Council, titled “Locked Out: Debanking the UK’s Digital Asset Economy,” which estimated that 40% of transactions to cryptoasset exchanges are either blocked or delayed by U.K. banks.

“The debanking of the U.K.’s digital asset economy is a major obstacle to its growth,” read the report. “And the issue is widespread: almost all of the major U.K. banks and payments services firms currently impose blanket transaction limits or complete blocks to cryptoasset exchanges.”

Stand With Crypto UK agreed with this assessment, saying in a June 10 post on X that “the issue we’re raising is clear. Across the U.K., banks are placing broad restrictions on fiat transfers to crypto asset exchanges, effectively blocking a whole sector.”

For this reason, the organization said it was “calling for the banks to take a risk-based, case-by-case approach to the crypto asset sector.”

In an open letter to local banks, the organization said: “We urge U.K. banks to change course and lift the blocks on transfers to cryptoasset exchanges. This is a consumer issue about choice, fairness and trust…people should be able to make lawful financial decisions with their own money.”

The advocacy group also called on its members, as well as any interested or affected parties in the U.K., to put pressure on the U.K. banking sector to change course by filing a complaint with their bank.

Despite the bleak picture the campaign paints of the U.K. digital asset landscape, the country is finally moving closer to a full regulatory framework for digital assets, which in turn may provide the clarity and certainty banks need to embrace the sector.

UK framework nears

The U.K. finally has a date for its long-anticipated regulatory framework for digital assets: October 25, 2027.

The Financial Conduct Authority’s (FCA’s) proposed regime is the result of years of consultations, including on stablecoin issuance and digital currency custody, prudential rules, the application of the FCA Handbook, regulating digital currency activities, and admissions, disclosures, and market abuse.

The regime aims to bring a broad range of crypto activities within the U.K. regulatory perimeter, with key features being mandatory authorization for firms, prudential capital and governance requirements, strengthened operational resilience standards, conduct rules covering custody, segregation of client assets, market abuse prevention, and disclosure requirements for issuers.

For stablecoins, there will be requirements to comply with new backing, redemption, and safeguarding rules, among other mandates. Meanwhile, the Bank of England (BoE) will be responsible for stablecoins deemed “significant” enough to potentially pose a broader risk to financial stability.

To smooth the transition to this impending regime, the FCA recently finished consulting on new guidance to help firms understand how they might be affected. Specifically, with regard to its interpretation of qualifying digital currencies, issuing qualifying stablecoins, operating trade platforms, dealing in and arranging deals with qualifying and safeguarding digital currencies, and staking.

Based on feedback from these consultations, the FCA and BoE are now finalizing their rules, which are due to be published this summer, after which digital asset firms can start applying for authorization from September 30 onwards.

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