British banks HSBC Holdings and the Nationwide Building Society have banned retail customers from buying cryptocurrencies with credit cards. They join a growing list of banks in the country to tighten restrictions on digital assets.
A Bloomberg report on March 2 said the step back was a response to warnings from U.K. regulators and scandals surrounding the crypto industry. Nationwide has reportedly imposed a daily limit of £5,000 ($5,965) on debit card purchases of crypto assets, while credit cards will no longer be accepted for crypto transactions.
Last month, HSBC customers were banned from buying cryptocurrencies with their credit cards. "This is because customers may be at risk," HSBC wrote in an email seen by Bloomberg. In both cases, the banks pointed to warnings from the Financial Conduct Authority (FCA) about the risks associated with crypto assets.
Other banks in the UK that have restricted crypto services include Santander, Natwest Group and Lloyds Banking Group. Most of the restrictions are on the cryptocurrency exchange Binance. HSBC banned credit card payments to Binance in August 2021, citing concerns about the exchange’s regulatory status in the country. British authorities are cracking down on crypto companies. The FCA proposed a set of rules in February that executives at crypto companies could be jailed for two years if they fail to meet certain conditions related to promotions. "Crypto-asset businesses marketing to UK consumers, including overseas firms, must prepare for this regime," the regulator said in a statement.
The financial authority also stated that all crypto exchange providers — including crypto ATM operators must register and comply with money laundering regulations.
A highly anticipated consultation paper on the UK’s upcoming crypto regulations was recently released. The proposals aim to establish the UK's financial services sector at the forefront of cryptocurrencies and avoid the stringent controls that have drawn attention globally. The document covers a wide range of topics including algorithmic stablecoins, non-fungible tokens and initial coin offerings.
