- UK Prime Minister Rishi Sunak strongly advocates crypto and wants the UK to lead in fostering the emerging space.
- Banks are not as amenable to crypto, limiting client access to digital assets and choosing not to service crypto businesses.
- Banking execs also believe policymakers dragged their heels, waiting for crypto to “die.”
Prime Minster for the UK Rishi Sunak, while still Chancellor of the Exchequer, positioned the UK government firmly behind cryptocurrencies. His positive approach to the financial technology has carried over into his premiership as he works to make the UK a crypto hub.
However, Sunak’s drive to create a crypto hub in the UK looks to be meeting hurdles from the banking sector and policymakers. There is a belief from top-level banking execs that UK policymakers purposefully dragged their feet on crypto as they “thought it would essentially die.”
Additionally, banking giants in the UK, such as HSBC and NatWest, have restricted transfers to crypto exchanges while crypto companies and start-ups have complained directly to the government as they are not being serviced by banks.
Restrictions on how clients interact with crypto through banks like HSBC and NatWest have been in the headlines recently. Both these banks limited customers to spending £1,000 a day on crypto and banned credit card purchases, citing regulators’ duty to protect clients and the perceived risk crypto brings as their reasons.
These limits infringe on people’s access to purchasing crypto but is much more limiting when it comes to operating as a crypto business in the UK.
According to many UK crypto executives interviewed by Bloomberg, they are facing a host of difficulties, ranging from having applications rejected to getting buried in paperwork. More recently, access to banking has worsened to the point that companies have complained directly to Sunak’s government.
Jeff Hancock, CEO of London-based crypto exchange Coinpass, says lack of access to banking “hampers any effort to make the UK a crypto hub, which is what Rishi and the government say they want.”
Are Bankers Following the Policy Makers?
While banks are being difficult when it comes to servicing crypto businesses in the UK, they may be mirroring policymakers who have not been fully behind the space. In a recent panel at the Citi Digital Money Symposium, Barclays head of digital policy Nicole Sandler said the way in which policymakers have moved around crypto has been intentional.
"I think one thing certain policymakers have said is that they left this market to do what it wanted to do because they thought it would essentially die," Sandler said. "And it hasn't died. It's grown, it's grown, it's grown."
If policymakers have not been proactive, deeming crypto to be a waste of time, and banks are emulating this attitude while also prioritizing customer protections, it seems a difficult road ahead for Sunak’s crypto hub dreams in the UK.
On the Flipside
- Another Sunak initiative, an NFT minted by the Royal Mint ordered in April 2022, has been dropped. The Royal Mint announced it was “not proceeding with the launch” following a consultation with the Treasury.
Why You Should Care
Proclamations about making the UK a crypto hub by its politicians are only as effective as the way policy and infrastructure is enacted. If the banking sector, and lawmakers, are not fully behind the plans to make the UK a hub, then this dream will never be realized.
Read more about Rishi Sunak’s belief in crypto:
Rishi Sunak: A Crypto Advocate in the Face of Economic Distress?
Read more about Gary Gensler’s belief in the U.S.’s regulatory framework:
SEC Chair Gensler Insists Crypto “Regulations Already Exist” Ahead of Hearing