Britain Wants to Know Why Its Banks Keep Saying No to Crypto

A formal inquiry has been launched by the APPG (Crypto and Digital Assets All-Party Parliamentary Group) on July 21, 2026, in regard to unbiased treatment of digital asset companies in the UK because banks are refusing to open bank accounts for crypto companies and ceasing their cooperation abruptly. The inquiry, chaired by Lord Vaizey of Didcot and Labour MP Gurinder Singh Josan CBE, will last for 6 weeks, and it is being held now when the discrepancy between the UK’s proclaimed cryptocurrency intentions and the existing banking situation becomes a topic of discussion.

The inquiry isn’t starting from a blank page. A survey from January that was conducted by the UK Cryptoasset Business Council (UKCBC), which investigated cryptocurrency exchanges including Coinbase, Kraken, Gemini, OKX, Bitpanda, Luno, Uphold, Wirex, Zumo, and Xapo Bank, reported that 40% of transactions sent to the cryptocurrency exchanges were blocked/delayed by the banks. The survey shows that out of the ten people contacted by the UKCBC, seven said that the banking environment in the UK became harsher for digital asset businesses. Furthermore, 70% of those interviewed stated that these restrictions discouraged them from investing, expanding, and hiring employees in the country.

According to one of the companies, which remains unnamed in the survey, the banks rejected around £1 billion (approximately $1.35 billion) worth of its transactions in one year. The number only accounts for rejected card payments and open-banking payments but does not include abandoned transactions that were never attempted.

The request made by UKCBC is not a general complaint at all; rather, it requests the Financial Conduct Authority to make banks distinguish between exchanges depending on their licensing status and fraud protection rather than applying the same restrictions to every exchange.

The inquiry revolves around two main questions. Firstly, it focuses on the challenges faced by crypto businesses (and in certain instances, their professional service providers, including insurers) to open and maintain their everyday business bank accounts. Secondly, it revolves around the fact that a number of prominent banks in the UK are putting transfer limits on transactions or blocking payments made to some crypto platforms altogether.

The lawmakers claim that they want to hear what is being said by both parties in relation to the situation, with crypto companies unveiling the obstacles they are currently facing in the process, and banks explaining the criteria for risk assessment in regard to digital assets. Written submissions are open from July 21 to August 31, after which the APPG will publish a report with recommendations for the government.

Importantly, the investigation will not evaluate British practices in vain. It intends to make comparisons between both UK banks and policies established in the United States and the European Union, among other key global financial centers.

The legal and compliance side of the industry has been circling one word throughout this debate: proportionate. Yuriy Brisov, a partner at London consultancy Digital & Analogue Partners, put it bluntly: a risk control either distinguishes a high-risk case from a low-risk one, or it doesn’t. And blanket bans and fixed transaction caps that apply equally to FCA-registered exchanges and unlicensed offshore platforms fail that test.

Brisov also pointed to a less-discussed structural incentive: since October 2024, UK payment providers have generally had to reimburse authorized push payment fraud victims up to £85,000 per claim. That rule may make it financially easier for a bank to simply block crypto-linked transactions wholesale than to evaluate them individually.

The best point made here is that it is specific to time. The FCA will unveil its application process for crypto companies looking to operate in the UK on September 30, 2026, before the new regime kicks in in October 2027.”Once the regulator has licensed a firm, a bank cannot claim that firm’s risk is unknowable,” Brisov said. “A country that calls itself a crypto hub cannot keep its payment system closed to the industry it licenses.”

Lord Vaizey explained the underlying regularity in a similar way, noting that the APPG has received various complaints about access to accounts and transactions from digital businesses for a long time now, so much so that the demand is now being made to put such complaints on paper.

The parallel that no one in the room explicitly mentions but everyone thinks of is “Operation Chokepoint 2.0”, which is how crypto companies in the US have been referring to what they perceive as the coordinated regulatory pressure applied to banks to cut them off. US regulators have resisted certain aspects of this story. The APPG has not gone so far as to make a direct analogy with the UK, but the American episode looms large over the inquiry.

This inquiry doesn’t exist in a vacuum. The UK’s Cryptoassets Regulations were laid before Parliament in December 2025, with the full licensing regime due to take effect on October 25, 2027. The time for applying for a license with the FCA comes right before the end of the investigation, which sets a race against time for the process of licensing: unless banking access is tackled prior to the commencement of actions by licensed companies, the paradox mentioned by Brisov (an industry regulated yet without a steady access to banking institutions) enters the realm of practical policy failure rather than being reduced to a mere theoretical statement.

The investigation into banking coincides with the broader digital assets trend in the UK. In a recent announcement, Chancellor Rachel Reeves has revealed the issuance of Britain’s first-ever sovereign Digital Gilt Instrument through HSBC’s Orion system using the Bank of England’s Digital Securities Sandbox by 2027, making the UK the first G7 country to issue a blockchain-based sovereign bond. On a different note, a joint UK- US statement through the Transatlantic Taskforce for Markets of the Future released common principles relating to stablecoin regulation, including asset backing and redemption rights.

The investigation against the new government comes at a time of tremendous political change. New Prime Minister Andy Burnham has canceled the centralized digital identification plan of the former government, diverting money into measures to combat the cost of living increase and selecting John Healey as Chancellor of the Exchequer. As for Jonathan Herbst, the global leader of financial services at Norton Rose Fulbright, the attractiveness of the UK to international companies depends not only on the effective nature of different laws but also on the stability of the acting regulatory regime.

Reactions from the industry to the abandonment of the digital identification process have differed. For instance, Stefan Deiss, co-founder of The Hashgraph Group, remarked that abandoning the centralized identification system is the right decision; however, he urges the government not to stop developing alternative identification technologies. According to him, people should possess wallets with personal data instead of relying on the state database.

There are no obligations here. The APPG is merely making recommendations through its report, and it does not hold any legal weight. However, there could not be a more inconvenient time for UK policy. The government is working hard to present itself as the global center for digital assets; it is going to start issuing licenses to crypto companies, and the banking industry keeps refusing to work with almost 40% of crypto transactions. The inquiry’s success will depend on how forthcoming banks are in their responses by the deadline of August 31.