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Inquiry launched in Westminster
A cross-party UK parliamentary group, the Crypto and Digital Assets All-Party Parliamentary Group (APPG), opened a banking inquiry on July 21 into whether banks are systematically blocking or restricting crypto businesses from accessing basic financial services.
“A UK parliamentary group has launched an inquiry into claims that cryptocurrency businesses continue to face difficulties accessing banking services despite the country’s efforts to position itself as a global digital assets hub”
The APPG said it is collecting written submissions from businesses across the banking, payments, fintech, and crypto sectors, with the evidence window open from July 21 to Aug. 31, and it plans to publish a report containing findings and recommendations to the government.
The probe is co-chaired by Lord Vaizey of Didcot and Labour MP Gurinder Singh Josan CBE, and it is framed around the UK’s new crypto regulatory framework coming into force next year.
Cointelegraph reported that a January survey by the UK Cryptoasset Business Council (UKCBC) found that 10 crypto exchanges said banks blocked or delayed 40% of transactions to crypto platforms, while Decrypt said the APPG will examine why firms struggle to open accounts and why banks restrict crypto-related payments.
The inquiry also coincides with political change after Labour Party leader Andy Burnham was sworn in as prime minister, with CoinMarketCap noting that the shift added political significance to what the group described as an urgent industry problem.
Debanking claims and competing views
The APPG’s inquiry is driven by years of complaints that UK crypto companies have been “debanked,” including accounts closed, payment services withdrawn, or banking relationships refused even after registering with the Financial Conduct Authority (FCA).
Decrypt said the APPG will test whether banking barriers could undermine the UK’s ambition to be a "global leader" in digital assets, and it quoted the joint statement from Josan and Vaizey that "Access to banking services is fundamental for any legitimate business."
Cointelegraph reported that the UKCBC survey found 70% of respondents said the restrictions had reduced their willingness to invest, expand or hire in the UK, and it said eight of the 10 respondents reported an increase in customers experiencing blocked or limited transfers over the previous year.
Yuriy Brisov, a partner at London-based consultancy firm Digital & Analogue Partners, told Cointelegraph that banks have legitimate obligations to manage fraud and money-laundering risks but argued their controls should distinguish between cases by risk levels, saying, "Proportionality has a simple test."
Brisov also warned that blanket policies and fixed transaction caps can apply regardless of whether funds are being sent to an FCA-registered exchange or an unlicensed offshore platform, and he argued that "Once the regulator has licensed a firm, a bank cannot claim that firm’s risk is unknowable."
What the inquiry could change
The APPG said it will weigh whether banking restrictions are proportionate and examine their effects on consumers, competition and innovation, while also looking at how restrictions are applied to crypto-related payments by several major UK banks.
“UK parliamentary group probes banking barriers for crypto firms A UK parliamentary group launched an inquiry into banking restrictions on crypto firms and consumers, including their impact on investment and competition”
CoinMarketCap reported that the inquiry is timed to feed into a regulatory transition, with the group saying it is the right time to examine whether remaining barriers could undermine the ambition as the regime comes into force next year.
Cointelegraph added that the inquiry comes ahead of the FCA beginning to accept authorization applications from crypto firms on Sept. 30, and it described a contradiction between the government’s global crypto hub goal and continued banking restrictions against exchanges.
Brisov told Cointelegraph that regulatory authorization would have limited practical value if licensed crypto businesses remained unable to access the banking system, saying, "A country that calls itself a crypto hub cannot keep its payment system closed to the industry it licenses."
CoinMarketCap also said the APPG will benchmark British banking approaches against international approaches in the US, Hong Kong, Australia, and the EU, with the aim of producing findings and recommendations for policymakers after the evidence window closes on Aug. 31.
