Several UK banks are refusing to provide banking services to crypto companies, according to a report by Bloomberg. The situation has worsened in recent weeks, leading to complaints by crypto firms to the government of Prime Minister Rishi Sunak. Challenges range from having applications rejected to accounts being frozen, with banks requesting additional documentation and information on monitoring client transactions. This stance contradicts Sunak’s plan to prioritize financial technology disruption and make the UK a global crypto hub.
Tom Duff-Gordon, VP of international policy at Coinbase, noted that the UK banking reaction to crypto firms has been more acute than that of the EU. He attributed the more receptive stance of EU banks towards crypto firms to the efforts of the European Union to establish a framework for digital assets, with the Markets in Crypto Assets (MiCA) legislation set for a final vote in April 2023.
Data from PitchBook indicates that venture capital investment in digital asset companies in the UK dropped by 94% to $55 million in 2023, while there was a 31% increase in other European countries. To maintain business operations in the UK, crypto companies are turning to payment service providers such as BCB Payments and Stripe.
In a tweet by the UK Treasury, the government reaffirmed its commitment to “support the development of new payment technologies and to explore how these technologies can help support a more diverse and resilient financial system.” Despite this, it appears that crypto companies are still struggling to gain access to banking services in the UK.
