UK Banks Block Crypto Access Despite Regulatory Green Light

The UK wants to be the world's crypto capital, but its banks didn't get the memo.

While regulators roll out the red carpet for digital assets, major British banks are slamming the door shut on customer access to crypto exchanges—even those with official government approval. A new report reveals the growing disconnect between the UK's crypto hub ambitions and banking reality.

The Approval Paradox

The Financial Conduct Authority has certified 59 crypto companies as compliant with anti-money laundering and terrorism financing rules, including household names like Coinbase, Kraken, and Gemini. You'd think that regulatory stamp of approval would smooth the path for customers. You'd be wrong.

According to the UK Cryptoasset Business Council's survey released Monday, 80% of exchanges reported increased customer difficulties with bank transfers in 2025. The numbers are stark: 40% of transactions were blocked or delayed, with one exchange witnessing nearly $1.4 billion in declined transactions due to bank-side rejections.

Seven out of ten major exchanges operating in Britain described the banking environment as more hostile now than a year ago. The remaining three said things stayed the same—hardly a ringing endorsement.

The Banking Wall

Major players like HSBC, Barclays, and NatWest impose caps on crypto exchange transfers. Others go further: Chase UK, Metro Bank, TSB, and Starling Bank block such payments entirely.

"We've made this decision to help protect our customers," a Starling spokesperson told CoinDesk, citing the "high risk digital assets represent." When pressed about the hostile environment perception, the bank offered only that it keeps "policies under constant review."

UK Finance, representing over 300 financial institutions, supports the FCA's regulatory work but maintains that individual banks "have a duty to protect their customers and make risk-based decisions about possible fraud, scams and economic crime threats."

Regulatory Progress Meets Banking Reality

The irony is palpable. The FCA, once highly restrictive toward crypto, has shown increasing openness. Last week, it began consulting on new rules for October 2027 implementation. The Treasury's end-2025 legislation extending financial rules to crypto marked a clear regulatory roadmap.

Yet as regulators open doors, banks are installing new locks. "The debanking of the UK's digital asset economy is a major obstacle to its growth," the lobby group wrote, noting that "new restrictions are being implemented" continuously.

One frustrated exchange executive captured the contradiction: "If we are registered with the FCA, it should not be this challenging for U.K. businesses. As a result, we have prioritised other markets."

The Global Competition Context

This banking resistance comes as other jurisdictions court crypto businesses. While the UK talks about leadership, its practical infrastructure—the banking system—creates barriers that competitors don't face.

The disconnect raises questions about execution versus ambition. Regulatory clarity matters, but market access through basic banking services may matter more for day-to-day operations.

Several crypto exchanges declined to comment, citing regulatory and legal sensitivities. The FCA and Treasury also declined to respond to questions about the banking restrictions.