UK Banks Limit Crypto Transactions Amid Regulatory Warnings
•HSBC Holdings Plc and Nationwide Building Society have taken measures to limit retail customers’ access to cryptoassets in response to the evolving legal and regulatory landscape surrounding the crypto industry.
•These measures include banning credit cards from making crypto purchases, setting daily limits on debit card purchases at £5,000 ($6,000), and restricting payments to major crypto exchange Binance.
•The reasons behind these decisions include warnings issued by organizations such as the Financial Conduct Authority (FCA), International Monetary Fund (IMF) and the Financial Action Task Force (FATF).
Regulator Warnings Prompt Banks to Limit Crypto Transactions
In response to the evolving legal and regulatory landscape surrounding the crypto industry, HSBC Holdings Plc and Nationwide Building Society have taken measures to limit retail customers’ access to cryptoassets. This latest development highlights the growing concerns and uncertainties faced by UK banks regarding the use and trade of cryptocurrencies.
Credit Cards Can No Longer Make Crypto Purchases
Nationwide has recently released more details regarding their decision to limit access to cryptoassets. As per their announcement, credit cards can no longer be used to make crypto purchases and daily limits on debit card purchases have been set at £5,000 ($6,000). Additionally, a reduced daily limit of £100 ($120) has been implemented for a specific account type tailored to young people under the age of 23.
Payments To Binance Restricted
“These will apply where we identify payments to crypto exchanges,” it said, adding:”These limits apply any time you use your card to make a payment. That includes using a digital wallet, such as Apple Pay or Google Wallet.”Additionally, card payments to the major crypto exchange Binance have been restricted and will be rejected – which follows “similar action from other providers”, adding that “even with your direct consent in person or by telephone, we can’t remove the restriction and allow you to make a payment to Binance.” Users can however still withdraw money they have with Binance into their Nationwide accounts.
Reasons Behind Restrictions
As for why these restrictions were put in place both banks pointed towards warnings issued by organizations such as the Financial Conduct Authority (FCA), International Monetary Fund (IMF) and Financial Action Task Force (FATF). Regulators including these three entities have consistently cautioned banks against facilitating crypto purchases due too perceived risks that come with buying cryptocurrency on traditional financial systems.
Other UK Institutions Take Similar Actions
Other UK institutions have tightened restrictions placed on crypto-related businesses over past few years including Banco Santander SA., Lloyds Banking Group Plc., Natwest Group Plc.. Notably while many banks may now impose limits related too exchanges such as Binance users may still withdraw money they have with them into their respective accounts.