UPDATE: UK banks are blocking nearly 40% of payments to cryptocurrency exchanges, according to a bombshell report released by the UK Cryptoasset Business Council (UKCBC). This shocking statistic comes amid a surge in “debanking” practices, severely impacting the crypto sector just as regulators finalize a comprehensive framework.
The report, titled “Locked Out: Debanking the UK’s Digital Asset Economy,” reveals that 80% of major exchanges—like Coinbase, Kraken, and Gemini—are experiencing increasing disruptions. One exchange reported almost £1 billion in rejected transactions over the past year. Despite being registered with the Financial Conduct Authority (FCA), exchanges are facing blanket restrictions from banks, including outright blocks from institutions like Starling Bank and TSB, along with strict transaction limits at Barclays (£2,500 per transaction, £10,000 monthly) and HSBC.
“This is designed to constrain the growth of the crypto industry,” one exchange stated, emphasizing that banks provide no explanations for their declines, which is frustrating for both businesses and consumers. According to the report, 100% of exchanges reported a lack of communication from banks regarding payment refusals.
The UKCBC warns that these practices could violate the Payment Services Regulations 2017, which require individual assessments for each transaction, as well as FCA Consumer Duty rules and the Competition Act 1998.
As the HM Treasury presented the Financial Services and Markets Act 2000 (Cryptoassets) Regulations to Parliament on December 15, 2025, the disconnect between regulatory progress and banking practices threatens to undermine London’s fintech leadership.
The survey highlights the increasing barriers for cryptocurrency exchanges in the UK, which scored a dismal 7.9/10 on banking access difficulty—worse than competitors like Singapore or Dubai. 70% of surveyed exchanges characterized the banking environment as “more hostile” compared to the previous year. Disruptions are affecting both bank transfers and card payments for 60% of firms, leading to widespread customer frustration, with 60% of affected users expressing their anger.
One UK-based exchange lamented, “We need support. If we are registered with the FCA, it should not be this challenging for UK businesses.” Another major player stated that these banking restrictions are the “single biggest problem” for launching new crypto products in the UK, forcing them to prioritize other markets instead.
The report indicates that nearly £1 billion in observable declines could be just the tip of the iceberg, with actual figures likely much higher. 70% of exchanges linked these banking restrictions to reduced hiring, scaling, and product launches in the UK. Challengers like Revolut and Monzo permit transfers but impose restrictions, such as 30-day limits, while traditional banks like NatWest and Santander enforce tighter controls.
This issue is not unprecedented. Barclays began blocking crypto transactions from June 27, 2025, citing volatility risks, and similar bans have been implemented by other banks like HSBC, Lloyds, and Nationwide. Chase UK ceased all crypto transactions starting in October 2023, stating that they would decline any payments related to crypto assets. NatWest CEO Alison Rose previously told Parliament, “We have taken a pretty hard line as a bank on crypto,” highlighting concerns over fraud and volatility.
The backlash from investors is mounting. Michael Healy, managing director at IG UK, criticized the situation, saying, “Millions of people are effectively being locked out of crypto just because of who they bank with.” With 12% of UK residents now owning crypto—up from 10%—the implications of these banking barriers are profound.
In response to these mounting pressures, UKCBC is calling for immediate reforms. They advocate for FCA and government mandates for case-by-case reviews for FCA-registered firms, frameworks that distinguish between exchanges, and mechanisms for data-sharing among banks and regulators.
“We’ve tried to engage the banks time and time again… but there is no appetite to find a path forward,” said one exchange. As the Bank of England considers new exposure limits for banks regarding crypto by 2026, the tension between innovation and stability will be crucial for London’s global ambitions.
With calls for action echoing across social media, users express their frustration over perceived “shadow-banning” of the crypto industry. Healy emphasized, “If the government is serious about making the UK a home for crypto innovation, it needs to act.”
This urgent situation is evolving quickly, and stakeholders are closely monitoring the government’s next steps. Will UK banks adjust their restrictive practices, or will the crypto industry face further challenges ahead? Stay tuned for more updates as this story develops.
