The United Kingdom has largely been found to be cold towards crypto firms that wish to settle in the country. In a recent letter to the regulators, a crypto advocacy group has suggested some points to make the financial system more inclusive.
On Tuesday, Crypto UK, a crypto lobbying group, sent a letter addressed to the regulators. The group suggested that banks in the country should be given a “whitelist” consisting of registered and licensed crypto firms. The group has suggested this to avoid the sector from being cut out or left out of the financial system.
Following the recent bank collapse which happened in the United States, the concerns over legitimate crypto companies getting debanked have spread to the UK. The majority of lenders in the UK say that they discourage access to riskier financial products for their customers’ own good.
Su Carpenter, Director of Operations at Crypto UK, said that they are calling on the government to explore a mutually beneficial path ahead. He added that the bans and restrictions would inhibit the sector’s growth and also hinder the nation’s aim of becoming a crypto hub. As stated in the letter:
We are calling upon the government to find a path forward. Blanket bans and restrictions of transfers from UK banks to crypto asset platforms will have the effect of fundamentally undermining the Government’s ambition to become a crypto asset hub.
Simultaneously, another letter calls for action from two other regulatory agencies in the country i.e. the Financial Conduct Authority (FCA) and Payment Systems Regulator. The letter from the agency highlighted the concerns as more and more British banks introduce blanket limits or bans on transfers from customer accounts to crypto exchanges.
In February, officials of top banks in the UK including Natwest, Lloyd Banks, etc. informed the lawmakers that they are blocking customers’ access to crypto assets due to concerns over fraud and volatility.
However, it’s not just the British entities that are wary of cryptocurrencies. In February, the United States Federal Deposit Insurance Corporation (FDIC) published data from Office of the Inspector General (OIG) that about 136 banks were already involved or are planning to be involved in various crypto-related initiatives. In the same report, the OIG called for the FDIC to offer proper guidelines for lenders under its mandate.