UK lawmakers are asking the country’s biggest banks to explain how they treat cryptocurrency businesses and crypto-related payments, as Parliament examines whether banking restrictions could hinder the sector ahead of the UK’s new regulatory framework in 2027.
The Crypto and Digital Assets All-Party Parliamentary Group (APPG) said its co-chairs, Labour MP Gurinder Singh Josan and Lord Vaizey of Didcot, have written to the chief executives of major British banks following reports that digital asset companies are struggling to secure or maintain banking relationships.
The lawmakers want banks to disclose whether they currently provide accounts to crypto businesses, why applications may be rejected, what restrictions apply to crypto-related payments and whether those policies could change once companies obtain authorization under the UK’s forthcoming crypto regime.
The APPG warned that limited access to banking services could become a significant obstacle to the growth of the UK’s digital asset industry and potentially influence where companies choose to establish or expand their operations.
Parliament examines crypto banking restrictions
The letters form part of an inquiry launched by the APPG on July 21 into banking and payment access for cryptocurrency and digital asset businesses.
The inquiry is examining whether banks are disproportionately restricting legitimate crypto companies and whether existing controls on crypto-related payments are appropriately balanced against fraud, money laundering and consumer-protection risks.
The APPG is accepting written submissions from banks, payment companies, fintech firms and crypto businesses until Aug. 31. After reviewing the evidence, the group plans to publish findings and recommendations for the government.
Lawmakers are seeking information across several areas, including:
- Whether banks currently provide accounts to crypto companies.
- Why banking services may be refused.
- Restrictions imposed on crypto-related transactions.
- The factors used when determining those restrictions.
- Whether FCA authorization would change a bank’s approach.
- What government or regulatory measures could improve banking access for legitimate firms.
The APPG has emphasized that the inquiry does not question banks’ responsibility to prevent financial crime or protect customers.
The central issue is whether banks should evaluate crypto companies individually based on their risk profiles rather than applying broad restrictions simply because they operate in the digital asset sector.
Major UK banks have restricted crypto payments
Several major British banks have introduced restrictions on transfers involving cryptocurrency exchanges, citing concerns over fraud, scams and potential consumer losses.
Research from the UK Cryptoasset Business Council estimated that roughly 40% of attempted transfers to crypto exchanges were being blocked or delayed by banks.
Reports have indicated that institutions including HSBC, NatWest, Monzo and Nationwide have imposed limits on crypto-related transfers, while Starling and Chase UK have taken more restrictive approaches.
The limits vary between institutions, with some banks reportedly setting monthly transfer caps in the thousands of pounds.
Banks argue that such measures are intended to protect customers from increasingly sophisticated scams and reduce the risk of significant financial losses.
Crypto businesses, however, contend that blanket restrictions can make it difficult for legitimate companies to operate even when they comply with existing regulatory and anti-money laundering requirements.
That tension is becoming increasingly important as Britain prepares to bring more crypto activity under its formal financial-services framework.
New FCA authorization regime arrives in 2027
The Financial Conduct Authority has already outlined the next stage of Britain’s crypto regulatory framework.
Businesses seeking authorization for regulated crypto activities are expected to be able to submit applications from Sept. 30, 2026, through Feb. 28, 2027. The new regime is scheduled to take effect on Oct. 25, 2027.
The framework is expected to cover areas including crypto trading platforms, custodians, intermediaries, stablecoin-related businesses and certain staking activities.
Companies currently registered under Britain’s anti-money laundering framework will not automatically receive authorization under the new system. Firms covered by the new rules will need to apply for authorization or otherwise meet the requirements necessary to continue operating.
The regime will also introduce requirements covering areas such as custody, market conduct, disclosures, prudential standards and customer protection.
The transition has raised a broader question for the banking industry: if a crypto company has been formally authorized by the FCA, should banks still restrict its access to basic financial services solely because it operates in crypto?
Government officials have previously suggested that authorized firms should not face sector-wide banking restrictions simply because of their connection to digital assets.
Economic Secretary Lucy Rigby told Parliament earlier this year that once the new regulatory framework is operational, the government would not expect FCA-authorized crypto companies to be restricted by banks solely because they belong to the crypto sector.
Crypto companies are already preparing for the new rules
Some international crypto companies have begun strengthening their UK regulatory presence ahead of the 2027 framework.
Robinhood, for example, secured FCA registration in August under the existing anti-money laundering regime, allowing it to provide covered crypto services in Britain while the new authorization system is being prepared.
However, registration under the existing framework does not automatically satisfy the requirements of the forthcoming regime.
This creates an important distinction for banks and crypto companies alike. A business can currently be registered to meet anti-money laundering requirements while still needing to obtain full authorization under the new regulatory framework.
The APPG’s inquiry could therefore influence how banks approach crypto businesses during this transition period.
The UK debate mirrors the US debanking controversy
The question of banking access is not unique to Britain.
US crypto companies have also accused financial institutions and service providers of distancing themselves from the digital asset industry because of regulatory pressure.
The controversy has frequently been described by crypto executives as “Operation Chokepoint 2.0,” referring to allegations that regulators encouraged banks and other financial institutions to reduce their relationships with crypto businesses.
Recent disputes have highlighted how important traditional financial infrastructure remains for digital asset companies.
Kraken, for example, recently won a $22 million arbitration award against former auditor Mazars USA related to the termination of its nearly completed 2022 audit.
Kraken co-CEO Arjun Sethi argued that the dispute demonstrated how the withdrawal of critical professional services can have broader consequences for financial companies, potentially affecting banking relationships, licensing processes and other operational requirements.
Banking access could become a competitive issue for the UK
The parliamentary inquiry arrives at a crucial moment for Britain’s crypto industry.
The UK is attempting to establish itself as a major regulated digital asset market while simultaneously introducing stricter requirements for companies operating in the sector.
If regulated crypto businesses continue to struggle with bank accounts, payment processing and basic financial infrastructure, the regulatory framework could become less effective in practice.
For crypto companies, regulatory approval may provide legal certainty, but access to banking remains essential for operating a real-world business.
The APPG’s investigation will therefore examine whether Britain’s banking system is preparing to support the next generation of regulated digital asset companies or whether restrictions on crypto-related accounts could become a structural barrier to the UK’s ambitions as a digital asset hub.
