A new report from the UK Cryptoasset Business Council (UKCBC) has revealed that major UK retail and commercial banks are obstructing approximately 40% of all transactions destined for digital asset exchanges. The survey, titled "Locked Out: Debanking the UK’s Digital Asset Economy," gathered data from ten large centralized exchanges operating in the UK, including Coinbase, Kraken, OKX, Gemini, and Bitpanda.
The scale of the problem is significant. One exchange reported close to £1 billion ($1.2-$1.4 billion) in declined transactions over the past year due to bank-side rejections in the UK alone. Furthermore, 80% of surveyed exchanges reported a sharp increase in customer payment issues over the last 12 months, with 70% describing the UK banking environment as becoming "more hostile." The UK scored 7.9 out of 10 for difficulty in accessing banking compared to other global markets.
The restrictions are broad and opaque. All surveyed firms stated that banks provide no clear explanations when payments are blocked, even for exchanges registered with the Financial Conduct Authority (FCA). Sixty percent reported disruption across both bank transfers and card payments. Specific banks were named as "particularly challenging," with Virgin Money, Metro Bank, Starling Bank, TSB, and Chase UK maintaining outright blocks on payments to exchanges. Traditional incumbents like Barclays and HSBC UK have implemented restrictive caps, limiting transactions to £2,500 per transfer and £10,000 over a 30-day rolling period.
The UKCBC argues these blanket measures, applied even to FCA-registered firms, raise legal concerns and could risk breaching existing UK regulations, including the Payment Services Regulations 2017, the FCA’s Consumer Duty, and the Competition Act 1998. Simon Jennings, executive director of the UKCBC, stated there is a "widespread concern within the industry that banks are using compliance posture as a proxy to hinder growth of the sector."
In response, the council has issued recommendations, urging the FCA and government to demand banks adopt a risk-based, case-by-case approach instead of sector-wide limits. It also calls for the creation of a formal forum for data sharing and the removal of unnecessary frictions for FCA-registered exchanges, which it views as anti-competitive. This banking friction is occurring as the UK proceeds with its comprehensive cryptoasset regulatory regime under the Financial Services and Markets Act 2000, with full commencement of the authorization regime expected in October 2027.
