An increasing number of UK cryptocurrency investors are facing difficulties in funding their accounts, reflecting regulatory and banking barriers faced by the industry.
According to a survey by IG Group, 40% of 500 UK crypto investors reported that their banks blocked or delayed payments to crypto service providers. Among those affected, 29% complained to their banks, while 35% switched lenders.
In the survey, 42% of respondents opposed bank intervention in crypto trading, while 33% expressed support.
Michael Healy, Managing Director of IG UK, stated, 'We are facing a disadvantage, as millions are excluded from the crypto space due to banking choices. This behavior is anti-consumer and even anti-competitive.'
Although crypto trading is legal in the UK, funding accounts remains a major challenge. Crypto companies must register with the Financial Conduct Authority (FCA) as virtual asset service providers to operate, and only FCA-authorized firms can provide fiat currency channels in pounds.
Some large banks, such as Chase UK and NatWest, restrict or block payments to crypto exchanges in the name of preventing fraud.
Furthermore, the FCA prohibits retail clients from using loans or credit cards to purchase digital assets, further restricting investors' funding channels.
The UK is falling behind in the global crypto race.
The UK's broad policies on digital assets have faced criticism. Former Chancellor and current Coinbase advisor George Osborne warned that the UK is 'falling behind' in the crypto race, which could undermine its global financial services position.
Osborne particularly pointed out the lack of progress in pound stablecoins, a market dominated by the dollar, with the pound's share being minimal. However, the FCA recently lifted the ban on retail trading of crypto exchange-traded notes (ETNs), reflecting an increase in industry maturity.