- Major UK banks have tightened crypto rules to prevent fraud and protect consumers.
- New FCA crypto rules set strict standards ahead of the October 2027 launch date.
- Regulation loses its value if licensed crypto firms can’t access bank accounts.
According to the Financial Times, UK lawmakers are warning that restrictions placed on crypto activity by banks could hold back the country’s digital asset industry. Banks like HSBC, Nationwide, NatWest, and Monzo have tightened rules around crypto, saying they’re trying to protect consumers and prevent fraud.
The timing is particularly interesting, considering that the UK’s FCA (Financial Conduct Authority) set out its framework for bringing crypto firms fully into the regulatory system.
The new rules will set requirements around financial resilience, market integrity, consumer protection, and services like running crypto exchanges, custody, and trading. Firms can apply for authorization between 30 September 2026 and 28 February 2027, and the full system goes live on October 25, 2027.
The FCA explicitly described the framework as part of its effort to position the UK as a global crypto hub.
UK Banks are Still Reluctant
The UK banks’ crypto restrictions and the FCA’s new regulatory framework create an obvious contradiction.
Regulation alone can’t address the entire issue. A regulated crypto exchange or blockchain company still needs access to basic banking services, including accounts and payment infrastructure.
A report from FT points to fraud prevention and consumer protection as the main reasons behind the limits banks have put in place.
From a bank’s perspective, there’s an assessment of risk here. If a crypto company ends up being used for scams or money laundering, the bank could face regulatory penalties and financial loss. Its reputation may be damaged too.
However, there’s another side to it. In the event that properly licensed crypto companies can’t get bank accounts, then regulation becomes much less useful.
A Test for the UK’s Crypto Strategy
If the new FCA framework gives banks a clearer way to determine which crypto companies are legit, it could make banking access easier over time.
In that case, clearer rules bring in more legitimate companies, banks feel safer, access to banking improves, more big investors jump in, and the entire UK crypto scene gets stronger.
This will be difficult to achieve as banks still treat the whole industry as risky even after it’s regulated, which would put the UK in a bad spot when it comes to being a global crypto hub.
It’s also worth noting that the FCA is currently working on a framework for tokenized gold, and big banks are already involved in the discussions. That suggests the UK finance sector may be more open to blockchain when it’s attached to familiar assets like gold, rather than to crypto itself.
As it stands now, the UK can regulate crypto’s status as a legalized asset, but it can’t function as a true crypto hub if firms are unable to open bank accounts.
Related: UK Weighs Tokenized Gold Rules as Shanghai Challenges London
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