A growing share of the United Kingdom’s cryptocurrency investors are struggling to fund their accounts, highlighting the regulatory and banking hurdles facing the digital asset sector.
An IG Group survey of 500 UK crypto investors and a broader sample of 2,000 adults found that 40% of users said their bank had either blocked or delayed payments to a crypto provider. Among those affected, 29% lodged complaints with their banks, while 35% said they switched lenders in response.
When the broader sample was asked about banks intervening in crypto transactions, 42% said they opposed such measures, while 33% expressed support.
“We’re in a damaging position where millions of people are effectively being locked out of crypto just because of who they bank with,” said 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.”
While cryptocurrency trading is legal in the UK, funding accounts can be a major obstacle. Crypto companies must register with the Financial Conduct Authority (FCA) as virtual asset service providers to operate, and only FCA-authorized companies can provide fiat on- and off-ramps in British pounds.
Some high-street banks, including Chase UK and NatWest, have gone further, restricting or blocking payments to crypto exchanges under the banner of fraud prevention.
On top of these barriers, the FCA has prohibited retail customers from using borrowed money, including credit cards, to purchase digital assets — further narrowing the funding options available to everyday investors.
Related: UK crypto hopes stall, but ‘encouraging signs’ are there
UK falling behind in global crypto race
Banking hurdles for UK crypto users come amid mounting criticism of the country’s broader approach to digital assets. Former Chancellor of the Exchequer and current Coinbase adviser George Osborne recently warned that the UK is “falling behind in the crypto race,” a shortcoming he said could undermine the nation’s role 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 said of digital assets in a Financial Times op-ed.
Source: Cointelegraph
Osborne singled out the lack of progress on stablecoins — a $288 billion market dominated by the US dollar, with virtually no presence from the British pound. According to CoinGecko, pound-denominated stablecoins account for just $616,000 in circulation.
Still, there has been some progress. As Cointelegraph reported, the FCA recently lifted its ban on retail trading of crypto exchange-traded notes (ETNs), effective Oct. 8. The regulator said the move reflects the maturing of the digital asset sector after years of volatility and what it once deemed a “lack of legitimate investment need.”
Related: ‘Everything is fine’: Coinbase mocks UK financial system in new video
