UK Lawmakers Probe 40% Crypto Transfer Blocks as Banking Scrutiny Widens

A cross-party group of U.K. lawmakers has opened an inquiry into banking restrictions affecting crypto companies and their customers. The review will assess whether account closures, payment blocks and transfer limits threaten Britain’s digital asset ambitions.

Key Takeaways

• The APPG opened a 6-week inquiry after banks reportedly blocked or delayed 40% of crypto transfers.
• HSBC and four rivals face scrutiny as 70% of exchanges link banking curbs to weaker U.K. expansion.
• APPG evidence closes August 31, before the U.K.’s crypto regime becomes mandatory in October 2027.

Crypto and Digital Assets APPG Seeks Evidence on Crypto Banking Barriers

British lawmakers are investigating whether banks are placing excessive restrictions on cryptocurrency businesses, raising concerns that limited access to financial services could weaken the country’s push to become a leading digital asset hub.

The Crypto and Digital Assets All-Party Parliamentary Group (APPG) launched the inquiry shortly after the U.K. completed its new regulatory framework for the sector. The group is co-chaired by former digital economy minister Lord Vaizey of Didcot and Labour lawmaker Gurinder Singh Josan.

Crypto companies have long reported difficulties opening and retaining bank accounts. Consumers have also faced payment limits or blocked transfers when sending money to exchanges.

Major lenders, including HSBC, Nationwide, Natwest, Santander and Starling Bank, have introduced restrictions on some crypto-related payments.

Inquiry to Test Whether Curbs Are Proportionate

The parliamentary group will examine access to bank accounts, payment services and insurance. It will also consider whether transfer limits and transaction blocks are justified by fraud and financial crime risks.

Lawmakers plan to assess the impact of those measures on consumers, competition, investment and innovation.

“Access to banking services is fundamental for any legitimate business,” Josan and Vaizey said in a joint statement. They warned that unnecessary barriers could restrict growth and undermine the government’s digital asset strategy.

Research published by the U.K. Cryptoasset Business Council in January estimated that banks were blocking or delaying about 40% of attempted transfers to crypto exchanges. Among the exchanges surveyed, 70% said banking restrictions had affected investment, hiring or expansion plans in the United Kingdom.

Government Faces Pressure Before 2027 Deadline

HM Treasury has acknowledged the issue. Economic Secretary Lucy Rigby told Parliament in March that firms licensed by the Financial Conduct Authority should not face restrictions solely because they operate in the crypto sector.

The inquiry will compare the U.K.’s approach with policies in the United States, Australia, Hong Kong and the European Union.

Recently, the U.K. and U.S. Transatlantic Taskforce for Markets of the Future published recommendations designed to strengthen cooperation on digital assets, stablecoins and tokenization.

The APPG will accept written evidence for six weeks, with submissions closing on August 31. It will then publish recommendations for the government.

The review comes before the U.K.’s new crypto regime becomes mandatory in October 2027. Its findings may help determine whether regulatory clarity alone is enough to attract digital asset businesses, or whether access to traditional banking remains the more immediate obstacle.