An increasing number of cryptocurrency investors in the United Kingdom are facing challenges in funding their accounts, underscoring the regulatory and banking obstacles in the digital asset space.
A survey by IG Group among 500 UK crypto investors and a wider sample of 2,000 adults revealed that 40% reported their bank had either blocked or delayed payments to a crypto provider. Of those impacted, 29% filed complaints with their banks, and 35% changed banks as a result.
When asked about bank interventions in crypto transactions, 42% of the broader sample opposed such actions, while 33% supported them.
“We’re in a damaging position where millions of people are effectively being locked out of crypto just because of who they bank with,” stated Michael Healy, IG’s UK managing director. “This kind of behavior is at best anti-consumer, at worst anti-competitive — and it’s not backed by the public.”
Although cryptocurrency trading is legal in the UK, funding accounts remains a significant barrier. Crypto companies are required to register with the Financial Conduct Authority (FCA) as virtual asset service providers to operate, and only FCA-authorized companies can facilitate fiat on- and off-ramps in British pounds.
Certain high-street banks, such as Chase UK and NatWest, have further restricted or blocked payments to crypto exchanges citing fraud prevention measures.
In addition, the FCA has prohibited retail customers from using borrowed funds, including credit cards, to purchase digital assets, further limiting the funding options for average investors.
Related: UK crypto hopes stall, but ‘encouraging signs’ are there
UK Falling Behind in Global Crypto Race
The banking challenges for UK crypto users occur amid increasing criticism of the country’s overall stance on digital assets. Former Chancellor of the Exchequer and current Coinbase adviser George Osborne recently cautioned that the UK is “falling behind in the crypto race,” a situation he believes could undermine the nation’s position in global financial services.
“What I see makes me anxious. Far from being an early adopter, we have allowed ourselves to be left behind,” Osborne remarked about digital assets in a Financial Times op-ed.
Source: Cointelegraph
Osborne highlighted the lack of advancements in stablecoins — a $288 billion market predominantly controlled by the US dollar, with little contribution from the British pound. According to CoinGecko, pound-denominated stablecoins represent only $616,000 in circulation.
Nonetheless, some progress has been made. As reported by Cointelegraph, the FCA recently lifted its ban on retail trading of crypto exchange-traded notes (ETNs), effective Oct. 8. The regulator stated this move reflects the maturation of the digital asset sector following years of volatility and a previously perceived “lack of legitimate investment need.”
Related: ‘Everything is fine’: Coinbase mocks UK financial system in new video
