UK Banks Limits Customers’ Access to Cryptoassets
Nationwide Building Society and HSBC Holdings Plc have tightened their limits on retail customers’ access to cryptoassets, following a series of industry scandals and regulatory warnings. The move makes them the latest UK banks to impose curbs on crypto purchases.
UK Banks are restricting cryptocurrencies. Nationwide is applying daily limits of £5,000 on debit-card purchases of cryptoassets, while its credit cards can no longer be used to buy crypto. HSBC said it barred customers from making crypto purchases via its credit cards from last… https://t.co/PYi5O1Eo5N
— Wu Blockchain (@WuBlockchain) March 3, 2023
Nationwide Restriction on Crypto Purchases
Nationwide Building Society announced on Wednesday that it will apply daily limits of £5,000 ($5,965) on debit-card purchases of cryptoassets. Its credit cards can no longer be used to buy crypto. HSBC, on the other hand, announced that it barred customers from making crypto purchases via its credit cards from last month, citing the possible risk to customers. Both banks referred to warnings issued by the Financial Conduct Authority, which has labelled crypto as high risk for several years.
The two banks join other institutions such as Banco Santander SA, Lloyds Banking Group Plc and Natwest Group Plc in placing crypto-specific limits on UK customers in recent years. Most of the major banks have also implemented exchange-specific restrictions, with the world’s largest crypto platform Binance Holdings Ltd. the most popular target.
Global Caution
The collapse of crypto exchange FTX in November has prompted fresh warnings about the dangers of crypto. Global bodies including the Financial Stability Board, the International Monetary Fund and the Financial Action Task Force have repeatedly cautioned banks against inviting the risks that cryptoassets can pose to the traditional financial system.
In the US, several banks with close ties to the crypto sector are facing growing scrutiny. Silvergate Capital Corp., the crypto-friendly bank, sank to a record low on Thursday after saying it was reviewing whether it can remain viable. Regulators including the Federal Reserve have told financial institutions to be wary of “potential heightened liquidity risks” presented by certain sources of funding from crypto-related entities.
As banks continue to implement restrictions on crypto purchases, investors and traders are expected to become increasingly wary of the asset class. While cryptoassets have attracted significant attention in recent years, the risks associated with them are becoming more apparent to regulators and financial institutions alike. It remains to be seen whether further restrictions on crypto purchases will be imposed in the UK and beyond.
