Headline: UK banks tighten crypto taps even as regulators push forward — exchanges say growth is being choked off The U.K. is moving toward clearer rules for crypto firms, but most British banks are still restricting customer access to even registered exchanges — leaving the industry in limbo and some firms eyeing friendlier markets. Regulatory progress — but not relief The Financial Conduct Authority now lists 59 crypto asset firms that meet the U.K.’s anti-money-laundering and counter-terrorism financing standards, including major exchanges such as Coinbase, Kraken and Gemini. The Treasury in late 2025 extended existing financial rules to cover the crypto sector, and the FCA has opened a consultation on new rules due to be implemented by October 2027. Despite that roadmap, exchanges say day-to-day access is getting harder. Banks clamp down, exchanges report growing “debanking” A new report from the UK Cryptoasset Business Council shows seven of the 10 top exchanges operating in the U.K. perceive increased hostility from national banks over the past year; the other three reported no change. Eighty percent of exchanges said more customers experienced blocks or limits on bank transfers in 2025, and 70% described the banking environment as more hostile now than 12 months ago. The survey also found that 40% of transactions were blocked or delayed. “The debanking of the UK’s digital asset economy is a major obstacle to its growth,” the group wrote, noting that “almost all of the major UK banks and payments services firms currently impose blanket transaction limits or complete blocks to cryptoasset exchanges” — a trend it says is worsening. Concrete impact on volumes and strategy One exchange reported nearly $1.4 billion in declined transactions in 2025 that were rejected by banks. Another said that if registering with the FCA doesn’t ease the situation, it has been forced to prioritize other markets. Where banks stand Among big lenders, HSBC, Barclays and NatWest impose transfer limits to crypto exchange accounts. Several banks — including Chase UK, Metro Bank, TSB and Starling — fully block transfers to exchanges. Starling defended its policy as customer protection, telling CoinDesk it does not enable customers to buy or sell cryptocurrencies via debit card or bank transfer and that it “keeps our policies under constant review” as FCA regulation evolves. UK Finance, which represents more than 300 banks and financial services providers, told CoinDesk it supports the FCA’s work on regulation and backs stablecoins and crypto custody under robust rules. It also stressed that individual banks must make risk-based decisions to protect customers from fraud, scams and economic crime. Limited public responses Several exchanges declined to comment, citing regulatory or legal caution. The FCA and the Treasury also declined to comment for the report. Why it matters The disconnect between regulatory progress and banking restrictions risks stalling onshore crypto growth: firms burdened by blocked payments face higher friction for customers, reduced liquidity and the incentive to shift focus overseas. With the FCA’s consultation ongoing and implementation not due until 2027, the industry will be watching whether banks soften their stance as formal rules come into force — or whether “debanking” becomes a lasting barrier for crypto in the U.K. Read more AI-generated news on: undefined/news

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