United Kingdom babanks HSBC Holdings and Nationwide Building Society are banning cryptocurrency purchases via credit cards for retail customers. They join a growing list of banks in the country to tighten restrictions on digital assets.
A Bloomberg report on March 2 claims the step back is a response to warnings by UK regulators and scandals surrounding the crypto industry. Nationwide is reportedly applying daily limits of £5,000 ($5,965) on debit-card purchases of crypto assets, while credit cards will no longer be available for crypto transactions.
Customers of HSBC were barred from making crypto purchases with their credit cards last month. “This is because of the possible risk to customers,” HSBC wrote in an email seen by Bloomberg. In both cases, the banks pointed to warnings issued by the Financial Conduct Authority (FCA), about the risks related to crypto assets.
Other banks in the UK with restrictions on crypto services are Santander, Natwest Group, and Lloyds Banking Group. Most of the restrictions target the crypto exchange Binance. HSBC banned credit card payments to Binance in August 2021, citing concerns about the exchange’s regulatory status in the country.
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Authorities in the UK are cracking down on crypto companies. The FCA proposed in February a set of rules that could subject executives of crypto firms to two years in prison if they don’t meet certain conditions related to promotion. “Cryptoasset businesses marketing to UK consumers, including firms based overseas, must get ready for this regime,” said the watchdog in a statement.
The financial authority stated that all crypto exchange providers — including crypto ATM operators — must be registered and comply with money laundering regulations.
A highly anticipated consultation paper for the UK’s upcoming crypto regulation was recently released. The proposals aim to establish the U.K.’s financial services sector at the forefront of crypto and avoid strict control measures that have gained traction worldwide. The document covers a wide range of topics, including algorithmic stablecoins, nonfungible tokens (NFTs) and initial coin offerings (ICOs).