Despite British Prime Minister Rishi Sunak's vision of establishing a crypto hub in the United Kingdom, banks in Britain are actively limiting the cryptocurrency-associated transactions. According to the Bloomberg report on April 2, banks in the UK, including HSBC and Natwest, have tightened their restrictions for crypto exchanges. Moreover, Barclays blocked transfers to Binance this year. As crypto transactions rely on the bridging of fiat on and off ramps, British banks are using the high street banking tools to restrict crypto exchanges.

Several crypto executives have shared their issues and difficulties in dealing with banks in the UK. SavingBlocks, a London-based crypto firm, applied for a corporate account to nine different banking service providers, only to be rejected by seven. The company’s founder Edouard Daunizeau lamented that there are few options available and most banks are unwilling to offer banking services to crypto firms. He even suggested considering and obtaining licenses in France, where the developments with banks might be easier to tackle with.

Further, UK-based crypto venture capitalists have seen a decline in funding opportunities. The situation, however, remains positive in other European countries. To tackle the restrictions, many crypto entrepreneurs are turning to third-party payment providers such as Stripe and Wise. However, these providers are also under the regulatory microscope, thereby complicating matters for cryptocurrency firms.

The UK government is appearing to take action too, as Economic Secretary Andrew Griffith announced in March that the Treasury would try to address the situation with lenders. However, unless and until the government makes progress in that direction, UK banks will remain the chokehold around the neck of the British cryptocurrency industry.



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