The Crypto and Digital Assets All-Party Parliamentary Group (APPG) has launched a comprehensive inquiry into banking access for cryptocurrency businesses in the UK. According to reports from the APPG, co-chairs Labour MP Gurinder Singh Josan and Lord Vaizey of Didcot wrote to major bank executives after hearing repeated accounts of digital asset companies struggling to open or maintain banking relationships in the UK. The inquiry, which opened on July 21, is examining whether banks have restricted crypto companies from accessing accounts and whether payment controls affecting the sector are proportionate to the risks involved. As reported by the APPG, the group has specifically asked banks to explain their approach to providing banking services to UK crypto and digital asset businesses, including whether their policies could change once the UK's new crypto regulatory framework becomes mandatory. The APPG has requested detailed information about whether banks currently provide accounts to crypto firms, why applications may be refused, and the factors used when setting restrictions on payments involving digital asset platforms.
Politicians have escalated their scrutiny by writing to the chief executives at every major bank in the UK, demanding comprehensive explanations regarding their restrictive policies toward cryptocurrency and digital asset firms. According to the latest reports, the APPG sent a letter on Tuesday warning that limited banking access threatens to stifle the UK's ambition to build a competitive digital finance hub. The letter lists six specific questions put to each bank: what its policy is, whether it currently serves crypto firms and why not if it does not, what limits it applies to crypto-related transactions, what factors drive that approach, whether the incoming regime will change it, and what the Government or regulators could do to help. The MPs stated that this letter is not intended to preempt the findings of the inquiry, but rather to gain an understanding of the positions of major banks. The APPG co-chairs emphasized that access to banking services could be one of the single biggest barriers to growth for UK crypto and digital asset businesses, potentially undermining the success of the UK's forthcoming crypto regime. The intervention underscores a persistent tension in UK crypto policy: regulators are building a licensing framework intended to legitimise the sector, yet firms report that de-risking by high-street lenders continues to make basic banking access difficult in practice.
Several large British banks have imposed significant restrictions on cryptocurrency-related payments and transfers. According to the UK Cryptoasset Business Council research from January, banks were blocking or delaying approximately 40% of attempted transfers to cryptocurrency exchanges. Reporting from crypto.news indicates that HSBC, NatWest, Monzo and Nationwide have introduced limits on transfers to crypto platforms, with limits ranging between £5,000 and £10,000 per month. Starling and Chase UK have prohibited such payments altogether, citing fraud, scam activity and consumer protection concerns as primary reasons. Banks highlighted an increase in crypto-related scams and the risk of retail customers losing large sums to volatile prices. The Financial Services Compensation Scheme does not cover crypto-related losses, adding another layer of risk for customers and institutions dealing with digital assets. The controversy surrounding "de-banking" is not unique to the UK, with some U.S.-based crypto firms previously accused the banking system of cutting ties under regulatory pressure.
The inquiry comes as the UK prepares for mandatory crypto regulations in October 2027. According to the APPG, the FCA's June framework allows businesses seeking regulated crypto activities to apply for authorization from September 30, 2026, until February 28, 2027. The full regulatory regime is expected to take effect on October 25, 2027, covering trading platforms, custodians, intermediaries, stablecoin issuers and regulated staking activities. As reported by the APPG, access to banking services could be one of the single biggest barriers to growth for UK crypto and digital asset businesses, potentially affecting the effectiveness of the regulatory framework and undermining the success of the country's forthcoming crypto regime. The timing places the inquiry on a collision course with the FCA's incoming regime, which becomes mandatory in October 2027 and is expected to bring digital asset firms under formal authorisation for the first time. If banks maintain restrictive policies even after firms gain FCA authorisation, the credibility of the 2027 regime itself could be called into question. For an industry watching whether the UK can position itself as a competitive jurisdiction alongside the EU's MiCA framework, the outcome of this inquiry — and how banks respond to direct parliamentary questioning — will be closely scrutinised by firms weighing whether to base operations in Britain.
HM Treasury's Economic Secretary Lucy Rigby addressed banking access concerns in March, telling Parliament that the government "would not expect" FCA-authorized crypto firms to face restrictions from banks "simply because of the sector they belong to." The APPG inquiry is accepting written submissions from banking, payments, fintech and crypto companies until August 31, 2025. According to the APPG, the inquiry will examine both sides of the issue, including financial-crime and consumer-protection requirements imposed on banks and the effect that account restrictions can have on crypto businesses seeking to operate in Britain. The group expressed particular concern that limited banking access could ultimately make it harder for licensed firms to grow and could impact the decisions of firms considering investing in the UK. Lawmakers believe that access to basic banking services may be one of the main challenges facing UK crypto businesses and could influence decisions of companies evaluating whether to invest in or expand within the UK, while acknowledging that banks must continue meeting financial crime and customer protection requirements. The APPG plans to publish findings and recommendations after reviewing submissions from the industry and financial sector, and the inquiry will also examine whether banking restrictions remain appropriate as regulated crypto businesses enter the new UK framework.
