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UK banks are blocking or delaying nearly two in five attempted payments to cryptocurrency exchanges — and at least one major platform has watched nearly £1 billion in customer transactions simply disappear. On Tuesday, cross-party parliamentarians decided they had heard enough, launching a formal inquiry into the practice.
The Crypto and Digital Assets All-Party Parliamentary Group launched a formal inquiry on July 21, 2026, opening a six-week call for written evidence from banks, payment companies, fintechs, and crypto businesses. The group is co-chaired by Lord Vaizey of Didcot — the former Government Minister for the Digital Economy — and Labour MP Gurinder Singh Josan CBE, and will publish a report of findings and recommendations directly to the UK Government once the evidence period closes.
The inquiry's scope extends beyond corporate bank accounts to everything the banking system touches: transaction payment restrictions, insurance, and professional services. For crypto businesses and their employees, that breadth matters — because the harm is not limited to firms that cannot open accounts.
Forty Percent Blocked: What the Numbers Actually Show
The size of the problem was documented in detail six months before Parliament acted. A January 2026 survey by the UK Cryptoasset Business Council, titled "Locked Out: Debanking the UK's Digital Asset Economy," drew responses from ten of the UK's largest centralized exchanges — collectively serving millions of customers and having processed hundreds of billions of pounds in transactions. The survey was covered in detail by The Block and independently confirmed by multiple outlets.
The findings were specific. Approximately 40% of all bank-to-exchange transfers in the UK are blocked or delayed. Eight of those ten exchanges reported a rise in customers encountering blocked or limited transfers over the previous 12 months — none reported a decrease. One exchange reported that banks had turned away nearly £1 billion in customer transactions over a single year.
The pattern extended to personal finance. In May 2025, reports in The Observer detailed how a senior employee of a publicly listed, UK-registered crypto company struggled to secure a mortgage because their salary was paid by a crypto business — an illustration of how the banking sector's posture toward the industry cascades into the lives of ordinary workers.
Which Banks Block Whom
The restrictions are not uniform in severity, but they are pervasive across the high street. According to survey data compiled by Stand With Crypto UK and the UKCBC report, Chase UK, Starling Bank, TSB, Virgin Money, and Metro Bank impose complete bans — blocking all bank transfers and card payments to crypto exchanges entirely. Details on individual bank restrictions were confirmed by CoinDesk.
Major incumbents take a different approach that still limits access: Barclays caps transfers at £2,500 per transaction and £10,000 over a rolling 30-day period; HSBC applies the same limits; NatWest allows up to £1,000 per day and £5,000 per month; Santander caps individual transactions at £1,000 and monthly transfers at £3,000, according to PaymentExpert's analysis.
Crucially, all of these restrictions apply regardless of whether the destination exchange is registered with the Financial Conduct Authority. One exchange captured the absurdity plainly in the UKCBC report: "If we are registered with the FCA, it should not be this challenging for UK businesses."
The scale of the response from the affected public is notable. The Coinbase-backed advocacy group Stand With Crypto UK formally launched its "Your Money. Your Choice" campaign on June 10, 2026, asking its 286,000 members to file formal complaints with their banks. Separate survey data from IG Group suggests that approximately 35% of customers who encountered payment restrictions have already switched banks in response.
Why Banks Are Actually Blocking Payments: The £85,000 Incentive
Banks' public justification centers on fraud prevention — and they have a specific regulatory reason for taking this position seriously.
On October 7, 2024, the Payment Systems Regulator's mandatory reimbursement requirement came into force. Under the new rules, banks became liable for up to £85,000 every time a customer falls victim to authorized push payment fraud — the type of crime in which victims are deceived into transferring money to a fraudster's account. The FCA reinforced the message that same day in a Dear CEO letter, naming APP fraud as a specific example of foreseeable harm that firms must avoid under Consumer Duty.
This created an asymmetric incentive structure. Blocking a legitimate crypto transfer costs a bank some customer goodwill. Allowing a fraudulent crypto-related payment to proceed could cost £85,000 per claim, plus regulatory scrutiny. Given that choice, blanket categorical blocking becomes a rational risk-management decision — even when the blocked payment was destined for a lawfully operating, FCA-registered platform.
The problem is that the Payment Systems Regulator's legal framework does not actually permit that approach. Regulation 105 of the Payment Services Regulations 2017 requires payment service providers to conduct case-by-case assessments of transactions they wish to restrict — not to apply categorical bans to entire sectors. Banks currently block all payments to crypto exchanges as a category, which the UKCBC argues may breach that specific provision. The same group also flagged the FCA's Consumer Duty (on the grounds that blocking customers' access to FCA-registered platforms may itself constitute a failure to deliver good outcomes) and the Competition Act 1998 (on the grounds that sector-wide coordination on exclusions may constitute anti-competitive behavior), as reported by The Block.
There is a second gap at the technical level. Banks' automated payment screening systems flag destinations by category — "crypto exchange" — rather than by entity-level risk. The FCA Register, which lists all authorized and registered crypto firms, is publicly available but is not integrated into real-time payment screening. The result is that being FCA-registered provides no machine-readable signal at the moment a bank decides whether to allow a payment through. Jess Houlgrave, CEO of WalletConnect, identified the structural fix: "The way forward is smarter permissions, not blanket bans. The UK can protect consumers and support its digital finance ambition by enabling standards for verified recipient identities, stronger beneficiary confirmation, and user-consented security flows — so banks can manage APP exposure while customers can still move their money to regulated services."
A British "Operation Chokepoint"?
The comparison to the United States is inevitable — and contested. In the US, critics argued that regulators and financial institutions collectively discouraged banks from serving crypto businesses in an informal campaign known as "Operation Chokepoint 2.0," with internal FDIC communications later surfacing in litigation suggesting coordinated pressure. US regulators have disputed elements of those claims.
The UK situation differs in a significant structural way: the restrictions here appear to originate with the banks themselves, not as a result of documented government coordination. HM Treasury stated in January 2026 that it does not expect FCA-authorized crypto firms to face transaction restrictions from banking providers, and that all firms should be treated fairly. The government has said the right things. The banks have continued to block.
That distinction matters for the APPG's inquiry. If the harm is government pressure, the remedy is legal action against regulators. If the harm is banks rationally responding to a flawed liability framework, the remedy is structural reform to that framework — specifically, either carving FCA-registered exchanges out of the APP reimbursement liability calculation or creating a statutory safe harbor that reduces per-transaction exposure when the destination exchange is verified as regulated.
The UKCBC drew the conclusion plainly: anti-competitive debanking practices are "undermining domestic innovation and driving competition overseas," and approximately 70% of the exchanges surveyed said restrictions had reduced their willingness to invest, scale, and hire in the UK.
Inquiry Arrives Just as Licensing Becomes Real
The parliamentary inquiry's timing is not accidental. On June 30, 2026, the FCA published its final rules and guidance for the UK's new cryptoasset regime under Policy Statement PS26/9 — completing a roadmap that began in earnest when Parliament passed the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026 on February 4, 2026. The FCA's authorization gateway is set to open on September 30, 2026, and will run until February 28, 2027; the mandatory regime comes into full force on October 25, 2027.
Under that new regime, crypto firms will receive formal FCA authorization — not merely AML registration — for the first time. In theory, that should provide banks with a cleaner, legally recognized status to assess against, removing the ambiguity that supposedly justifies categorical exclusion. In practice, the banking sector's current posture, if left unchanged, could persist even under full licensing: there is no requirement in the new framework that banks must accept FCA-authorized crypto firms as customers.
The APPG has not merely been reactive. The group met with UK industry leaders at a Parliamentary "Crypto Summit" in May, and co-chair Gurinder Josan MP traveled to Washington DC to hear directly how the US is approaching digital asset regulation. The cross-party nature of the inquiry — spanning Conservative peers and Labour MPs — signals that the frustration with the banking sector crosses normal political lines.
How to Submit Evidence and What Comes Next
The inquiry's six-week call for evidence is now open. Written submissions are invited from banks, payment providers, fintechs, crypto businesses, professional services firms, and any individual affected by crypto-related banking restrictions. The APPG has stated that it will examine how restrictions are applied, whether they are proportionate, and what their impact is on consumers, businesses, innovation, and competition.
The inquiry's findings will be published as a formal report with recommendations addressed to the UK Government. Unlike parliamentary select committees, APPGs cannot compel testimony or create immediate legal obligations. What they can do — and what this inquiry may deliver — is a public record precise enough to force the government to choose between its stated ambitions for the UK as a global crypto hub and the banking practices that are currently making that ambition difficult to take seriously.
Frequently Asked Questions
Which UK banks currently block all transfers to crypto exchanges?
Chase UK, Starling Bank, TSB, Virgin Money, and Metro Bank impose complete bans on both bank transfers and card payments to crypto exchanges, according to data compiled by Stand With Crypto UK and the UKCBC "Locked Out" report. Barclays, HSBC, NatWest, and Santander allow transfers but enforce strict caps — ranging from £1,000 to £2,500 per transaction depending on the bank, as detailed by PaymentExpert.
Is it legal for UK banks to block payments to FCA-registered crypto exchanges?
The UKCBC and legal analysts have raised substantial doubts. Regulation 105 of the Payment Services Regulations 2017 requires banks to conduct case-by-case assessments before restricting individual payments — it does not authorize categorical sector-wide bans. The FCA's Consumer Duty rules may also be implicated if blocking customers from accessing FCA-registered platforms constitutes a failure to deliver good outcomes. No court has yet ruled definitively on this question, and the APPG inquiry is partly designed to build the evidentiary record that could support enforcement, as The Block reported.
Why are banks blocking crypto payments if crypto is legal in the UK?
The primary driver is financial: since October 7, 2024, banks have faced mandatory £85,000 liability per claim when customers fall victim to authorized push payment fraud. Crypto-related transfers represent a disproportionate source of such fraud claims. Banks' automated payment systems flag crypto exchanges as a category — not per-entity — meaning there is no mechanism for distinguishing a regulated FCA-registered exchange from an unregistered platform at the moment of payment. The rational response under that incentive structure is to block the entire category, even though existing law may already require a more targeted approach.
Can I submit evidence to the APPG inquiry, and how?
Yes. The inquiry's six-week call for evidence is now open following its launch on July 21, 2026. Written evidence is invited from banks, payment providers, fintechs, crypto businesses, professional services firms, and affected individuals. Details on submission — including the submission email and deadline of August 31, 2026 — are available through the APPG's secretariat at CryptoUK.
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