The UK's Crypto and Digital Assets All-Party Parliamentary Group (APPG) has launched a formal inquiry into banking restrictions facing cryptocurrency businesses. The inquiry was announced on Tuesday by co-chairs Lord Vaizey of Didcot and Labour MP Gurinder Singh Josan CBE. The APPG is inviting written evidence from across the banking, payments, fintech and crypto sectors, with written submissions accepted from July 21 through August 31. The parliamentary review will gather evidence from banks, payment companies, fintech firms, crypto businesses and other stakeholders before publishing a report setting out its findings and recommendations to the UK Government. As reported by multiple sources, the parliamentary review will examine difficulties opening and maintaining business accounts, transfer limits, payment blocks, and whether banks apply restrictions proportionately.
The inquiry focuses on banks that refused crypto firms accounts or introduced restrictions on crypto transactions. According to the APPG, several major UK banks have introduced restrictions on crypto-related payments, contributing to what the group describes as a systematic debanking of firms and individuals. The scale of the issue remains significant, with research from the UK Cryptoasset Business Council, published in January 2026, found roughly 40% of payments to crypto exchanges were blocked or delayed by UK banks. One platform reported almost £1 billion in rejected transactions during 2025, while 80% of exchanges saw customer friction increase, and 70% described banking conditions as more hostile than a year earlier. The APPG will examine reports that crypto firms have been denied banking services or experienced account closures, alongside claims that businesses connected to the sector, including professional service providers such as insurers, have also encountered difficulties.
The banking inquiry comes as cryptocurrency has achieved significant mainstream recognition, with crypto assets under management growing by 22.9% per year from 2017 to 2025. According to recent market data, crypto assets reached a peak of USD 4.4 trillion in Q4 2025 before declining to USD 2.4 trillion by March 2026, representing 1.1% of the global market portfolio. The market remains highly concentrated, with Bitcoin accounting for 56.1% of total crypto value, followed by Ethereum and Tether, while the top eight cryptocurrencies represent nearly 90% of the market. Bitcoin ETF assets have reached USD 88.4 billion by Q1 2026, with Bitcoin ETFs representing 87.5% of the crypto ETF market, significantly broadening institutional access to digital assets.
The inquiry arrives during a critical period as the UK's FCA crypto framework becomes mandatory on October 25, 2027, with the authorization window opening in September 2026. The APPG will examine why FCA-registered businesses continue facing banking hurdles despite regulatory progress, particularly as licensed firms approach the October 2027 deadline. Industry participants are expected to advocate for case-by-case risk assessments instead of blanket restrictions on FCA-registered crypto firms. The inquiry will also compare the UK's approach with the US, Hong Kong, Australia, and the European Union to understand how competing jurisdictions have handled similar challenges. This comes at a time when digital asset firms are increasingly seeking traditional banking relationships as more jurisdictions introduce dedicated crypto regulations and licensing regimes.
The inquiry arrives during a political transition with Andy Burnham becoming Prime Minister on Monday, while John Healey was appointed Chancellor of the Exchequer. Legal experts say global financial firms will closely watch whether the new government delivers a stable regulatory environment for digital assets and financial services. Difficulties obtaining banking services have been one of the crypto industry's longest-running complaints in several jurisdictions. In the United States, allegations that regulators and financial institutions collectively discouraged banks from serving crypto businesses became widely known within the industry as 'Operation Chokepoint 2.0'. Industry participants argued that lawful companies were effectively cut off from the banking system through regulatory pressure, although U.S. regulators have disputed aspects of those claims. The APPG will assess how competing jurisdictions have handled similar challenges, including Kraken's $22 million settlement from an auditor it claimed abandoned the exchange during Operation Chokepoint 2.0.
