waving flag of United Kingdom

Digital asset firms are being locked out by banks in UK: report

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Prime Minister Rishi Sunak’s push to make the United Kingdom a digital asset hub is getting a pushback from financial institutions, which are reportedly locking out operators in the country. According to one report, U.K. virtual asset service providers (VASPs) are struggling to land banking partners and are having their accounts frozen and closed.

In the past few years, banks have restricted the services they offer to VASPs in the U.K., and last year’s industry carnage didn’t help Bitcoin’s case, Bloomberg reports. Citing over a dozen U.K. VASP executives, the outlet found that even those that had secured banking partners in the past are having their accounts restricted and, in some cases, their funds frozen.

“There aren’t many options available – most traditional banks won’t offer banking services to crypto firms. With the recent string of events it will be even tougher. We are seeking licenses in France where we think it will be easier,” Edouard Daunizeau told the outlet.

Daunizeau is the founder of SavingBlocks, a digital asset startup that caters to passive digital currency investors. He told Bloomberg he’s applied for a corporate account with nine banks, with seven rejecting him. The other two that have opened an account for him have become hostile in recent months and are demanding additional documents under the threat of closing his account.

Tales from other U.K. digital asset ecosystem executives are similar. While some are outrightly rejected by the banks, others are buried in paperwork for months.

Rejection by the banks isn’t new to VASPs. Across the world, from the United States and Brazil to Japan and Nigeria, the industry has struggled to access basic banking services. Most banks blame the regulatory ambiguity in their country which leaves them in fear of a crackdown.

However, industry executives say U.K.’s clampdown has been tougher than most countries.

While Sunak is pro-Bitcoin and even commissioned a national NFT project—which was recently canceled—the banking industry could be the biggest hindrance to his Bitcoin vision.

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