UK Banks Block 40% of Crypto Transfers, and 286,000 Users Aren't Banking on It 🏦

Stand With Crypto UK has launched a campaign urging its 286,000 members to push back against British banks that restrict or block transfers to cryptocurrency exchanges, arguing that blanket limits on payments to regulated platforms are limiting access to digital assets. The advocacy group cited a report from the UK Cryptoassets Business Council finding that 40% of crypto transactions are blocked or restricted by UK banks, with many of the limits applied to transfers involving exchanges registered with the Financial Conduct Authority regardless of individual customer risk profiles.

According to the report, one exchange recorded nearly 1 billion British pounds in declined transactions over a one-year period due to bank-side rejections, and 80% of surveyed platforms reported an increase in blocked or restricted transfers. Stand With Crypto said members can submit complaints through a tool on its website that generates letters challenging transfer restrictions, with bank responses expected to inform the campaign's next steps.

Mark Fairless, CEO of UK clearing bank ClearBank, told Cointelegraph that banks should take a risk-based approach to crypto-related payments rather than imposing broad restrictions across the sector. "Interventions should be targeted and proportionate, as broad blocks risk undermining competition and the ability of regulated firms to operate effectively in the UK," Fairless said.

The campaign comes as UK regulators continue work on a framework for stablecoins. At the beginning of May, a House of Lords committee examined proposed stablecoin regulations, with lawmakers questioning industry executives on bank-run risks, anti-money laundering controls and the potential impact of stablecoins on traditional banking. Later that month, the Bank of England said it was reconsidering proposed caps on stablecoin holdings and reserve requirements as it reviewed its framework for pound-denominated stablecoins, with non-dollar stablecoins currently accounting for only a small fraction of the global market.

In June, a House of Lords committee said certain proposed stablecoin requirements, including reserve and holding rules, could limit the viability of pound-denominated tokens, and urged regulators to avoid measures that could inhibit the growth of the sector while finalizing the country's stablecoin framework. Beyond stablecoins, regulators have advanced broader digital asset initiatives, with the central bank in May proposing extended operating hours for the country's settlement infrastructure to support tokenized markets, and the Financial Conduct Authority advancing additional digital asset initiatives.