While British prime minister Rishi Sunak fabricated dreams of making the country a hub for cryptocurrencies, the banks in the region seem to be acting exactly contrary to it. A recent media report has flagged some of the steps taken by banks in the United Kingdom toward cryptocurrencies.
Sources reveal that banks in the UK are restricting transactions and their dealings with crypto companies and exchanges. According to a recent report from Bloomberg, HSBC, and Natwest have restricted the amount of money customers can move onto crypto exchanges whereas Barclays halted the transfers to Binance, the world’s largest crypto exchange in 2021 itself.
Additionally, in the present scenario, crypto needs fiat on and off ramps. An on-ramp is any platform that facilitates users to acquire crypto assets or enter their markets. On the other hand, an off-ramp is a platform that facilitates a user to dispose of crypto assets or exit their markets.
Unfortunately, this implies that crypto assets are relying on banks, and limiting transactions is just one tool in the high street bank’s arsenal. Several crypto executives have reported numerous problems dealing with banks in the UK.
However, banks are not the only problem that crypto entities in the country are facing. According to the report, the issues range from excessive lengthy paperwork to bureaucratic hurdles to having applications rejected.
A London-based crypto firm opened up about difficulties in dealing with banks. It applied for a corporate account with nine different banking service providers and was turned down by seven of them.
Edouard Daunizeau, the founder of the firm said, “there aren’t many options available and most traditional banks won’t offer banking services to crypto firms.” He is considering a move to more friendly climbs in Europe. Tom Duff-Gordon, vice president of international policy at Coinbase said:
The UK banking reaction has been more acute than the EU one.
Sources suggest that banks generally have a dislike for crypto because it threatens their business model. They cite money laundering concerns, but the reality is that banks make money from other people’s money and give little in return.
In April last year, the British prime minister announced an initiative to attract crypto firms to the UK. However, the bank’s approach has been making settlement and functioning very difficult for them. Furthermore, crypto venture capital funding has slumped in the UK. Conversely, it remains relatively healthy across Europe.
Jeff Hancock, CEO of a London-based crypto exchange, said the restricted access to banking “hampers any effort to make the UK a crypto hub, which is what Rishi and the government say they want.”
In particular, the scenario for cryptocurrencies is proving to be much more beneficial in Europe. With its landmark crypto regulation, MiCA scheduled for discussion this month, several dignitaries have counted on it to reasonably allow space for innovation. Additionally, French regulators have also counted to be one of the friendliest toward crypto.
As reported by Todayq News in October, the third-largest bank in France and the sixth-largest bank in Europe by market capitalization, Société Générale, subtly received regulatory authorization to operate as a provider of digital asset services in the nation last month.
As of September, the banking behemoth can now custody, sell, and digitally trade assets through its fully integrated blockchain-focused subsidiary, Societe Generale Forge. This is due to a decision made by the French financial market regulator, the Autorité des Marchés Financiers (AMF), regarding digital asset service providers (DASP).
In recent times, Europe is rising as a safe haven for crypto entities. Daniel Seifert, Coinbase’s Vice President and Regional Managing Director in Europe in a blog post emphasized that the U.S. government’s hawkish approach to crypto regulation has “left a vacuum that other countries are eager to fill” and Europe is winning the race as he suggests.