UK crypto advocates push back on exchange transfer restrictions, say banks are 'choking off' adoption

Crypto advocacy group Stand With Crypto's UK branch launched a campaign on Wednesday, urging banks to lift restrictions on transfers to crypto exchanges. The group says the limits run counter to the country's goals of becoming a global digital asset hub.

The group encouraged its more than 286,000 registered UK advocates to file complaints with their banks over what it called "blanket restrictions" on transfers to crypto exchanges, including those that are already registered and legally compliant under the UK's Financial Conduct Authority (FCA) watchdog.

Stand With Crypto UK cited findings from the UK Cryptoassets Business Council's "Locked Out" report released earlier this year. The study found that around "40% of attempted transactions from UK banks to crypto exchanges are either blocked or delayed, and 80% of exchanges report a noticeable increase in customer friction over the past year."

One exchange even reported nearly £1 billion (~$1.3 billion) in cancelled transactions in just the span of a year due to bank rejections, according to the report.

"People across the UK are being blocked from accessing a legal asset class because banks have chosen to impose blanket restrictions on an entire sector," Stand With Crypto UK Director Adriana Ennab said in a statement. "Consumers should be treated as individuals, not subjected to one-size-fits-all policies."

UK crypto baby steps

The campaign comes as UK regulators have taken small steps toward accepting and integrating digital assets into the country's financial system.

Last week, the House of Lords Financial Services Regulations Committee warned that Britain risks falling behind the U.S. and the European Union on stablecoin regulations.

Meanwhile, the FCA recently proposed allowing investment funds to allocate up to 10% of their assets to crypto exchange-traded notes. Earlier this year, UK retail investors also regained tax-advantaged access to crypto exchange-traded notes through the Innovative Finance ISA framework.

Despite this, crypto investors still argue that access to friendly banking services is one of the biggest hurdles.

"The Government has set out a vision to make the UK a global hub for digital assets and Web3," Katie Harries, Coinbase's head of policy for Europe, said in a statement. "But the banks are choking off the crucial on-ramp from fiat money into crypto."