Digital currency

UK banks ban digital currency deposits: report

Digital currency speculators in the United Kingdom are reportedly facing increasing difficulties accessing their gains, with the country’s major banks shutting down deposits from cryptocurrency exchanges.

According to recent reports, banks such as HSBC have already introduced measures that prevent transfers from digital currency exchanges to their accounts, effectively preventing speculators from cashing out any gains.

The world’s sixth largest bank, and one of the largest by customer numbers in the U.K., the decision from HSBC is likely to pose significant challenges for digital currency investors and users in the country, now unable to freely access funds through their HSBC accounts.

This joins other banks and institutions which have prohibited deposits to digital currency exchanges, or purchases of digital currency via debit and credit cards. As a result, U.K. residents are already reporting difficulties with fiat to digital currency exchange and vice versa.

The development is in keeping with the U.K.’s emerging reputation as a strict jurisdiction for digital currency users. It follows from a ban on digital currency derivative trading announced back in October 2020, and comes fresh off new warnings from the FCA about the impact of digital currency scams in the country.

The move is expected to push HSBC customers towards new startup banks, which invariably have a friendlier approach to digital currencies and digital assets. Some investors are also relying on decentralized finance and stablecoins, or simply spending their digital currencies without converting to fiat, in order to get around the new restrictions.

Nevertheless, the decision by the country’s leading banks is set to make it even more difficult for individuals to access, spend and convert digital currency within the U.K.

The HSBC decision comes at a time of increasing interest in digital currencies and stablecoins across the U.K., particularly in light of recent market rallies. While these pose risks to unsuspecting investors, the practical challenges of bank obstruction are likely to cause further problems for those interacting with digital currencies from the country.

See also: CoinGeek Live panel, Digital Currency & Global Compliance: Tools & Tips for Exchanges, Wallets & Other Service Providers

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