UK Banks Still Blocking Bitcoin, Policy Group Tells Parliament
A policy group has criticized British banks for applying blanket restrictions to lawful bitcoin activity. The group says that no improvements have been made over the past three years in how banks treat bitcoin activity, with roughly 40% of bank-to-exchange transfers in th…
Intelligence analysis by Llama
A policy group has slammed British banks for not improving their treatment of bitcoin activity, with 40% of bank-to-exchange transfers being blocked or delayed. The group has called on banks to give reasons for rejecting bitcoin-related activity and has submitted evidence to a parliamentary inquiry.
Imagine you want to send some money to someone using a special kind of money called bitcoin. But the bank says no, even though it's a special kind of money that's allowed. This is what's happening in the UK, where banks are blocking or delaying 40% of bitcoin transactions. It's like the bank is saying, 'Sorry, we don't like this kind of money, so we're not going to let you use it.' But the problem is, this kind of money is actually allowed, and it's being unfairly restricted.
Analysis
Bitcoin Policy UK's Criticism of British Banks
Bitcoin Policy UK has criticized British banks for applying blanket restrictions to lawful bitcoin activity. The organization says that no improvements have been made over the past three years in how banks treat bitcoin activity, with roughly 40% of bank-to-exchange transfers in the UK being blocked or delayed.
The Issue with UK Policy
The British government has said since 2023 that banks should assess case by case rather than restrict by sector. However, the group says that practice has not followed, and that the gap is widening as the UK moves toward full implementation of its cryptoasset regime in 2027.
The Impact on Bitcoin Activity
The issue is not just with the banks, but also with the UK policy that treats 'crypto' as one thing, so bitcoin is caught by rules written for unbacked tokens and issuer-dependent stablecoins. This has led to a situation where bitcoin activity is being unfairly restricted, which can have significant implications for the development of the cryptocurrency market in the UK.
The Way Forward
The group has called on British banks to give reasons for rejecting bitcoin-related activity and has submitted evidence to a parliamentary inquiry. They are also pushing for a regulatory statement that bitcoin activity through an FCA-registered exchange should not face blanket restriction, a duty on banks to give specific reasons and an appeals route, confirmation that FCA registration can serve as a risk basis, and a published periodic measure of restriction levels.
Key points
- British banks are applying blanket restrictions to lawful bitcoin activity.
- Roughly 40% of bank-to-exchange transfers in the UK are being blocked or delayed.
- The UK government has said that banks should assess case by case rather than restrict by sector.
- The group has called on British banks to give reasons for rejecting bitcoin-related activity.
- The group has submitted evidence to a parliamentary inquiry.
If the UK government and banks work together to address the issues with bitcoin activity, it could lead to a more favorable environment for cryptocurrency development in the UK. This could attract more businesses and investors to the market, leading to growth and innovation.
If the issues with bitcoin activity are not addressed, it could lead to a continued decline in the use of cryptocurrency in the UK. This could also lead to a loss of business and investment opportunities, as well as a negative impact on the overall economy.
