Even as U.K. crypto rules inch forward, most major banks still block customers from using even registered exchanges.
The Financial Conduct Authority maintains a register of approved cryptoasset firms meeting anti-money laundering standards, now totaling 59 companies. Released on Thursday, the list includes Coinbase Global (NASDAQ: COIN), Kraken, and Gemini, which are all legally cleared to operate under current U.K. rules.
However, customers attempting to fund accounts on those platforms often hit bank transfer blocks or strict limits. A report released Monday by the UK Cryptoasset Business Council described a sharply worsening banking climate for exchanges.
Seven of the ten largest exchanges said national banks acted more hostile toward crypto activity over the past year. Meanwhile, the remaining three exchanges said conditions stayed broadly the same, with no meaningful improvement.
Additionally, 80 per cent of surveyed exchanges reported more customers facing blocked or limited transfers during 2025. The report also found that 70 per cent of respondents viewed the banking environment as more hostile than a year earlier.
Consequently, exchanges estimated that banks blocked or delayed roughly 40 per cent of attempted customer transactions. The lobby group argued that widespread “debanking” now represents one of the sector’s biggest barriers to growth.
It said most large U.K. banks and payment firms impose blanket limits or outright bans on crypto exchange transfers. Furthermore, the group warned that banks continue adding new restrictions despite clearer regulatory signals from government.
The FCA previously took a hard line on crypto, but it has recently adopted a more open posture.
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Banks show little sign of relaxing digital asset policies
Last week, the regulator began consulting on a new crypto rulebook scheduled for implementation by October 2027. Additionally, U.K. lawmakers clarified the regulatory path in late 2025 by extending existing financial laws to crypto.
Despite that progress, one registered exchange said operating in Britain remains unnecessarily difficult for compliant firms. As a result, that exchange said it has shifted investment and growth plans toward other global markets.
Another exchange reported that banks declined nearly USD$1.4 billion in customer transactions during 2025 alone. The banks, however, show little sign of relaxing their policies toward digital asset transactions.
Among the largest institutions, HSBC (NYSE: HSBC), Barclays (NYSE: BARC), and NatWest (NYSE: NWG) cap crypto transfers. Additionally, several banks fully block payments to exchanges, including Chase UK, TSB, and Starling Bank.
Metro Bank (LSE: MTRO) also restricts certain crypto transactions, citing elevated fraud and consumer risk concerns. Starling said it blocks all crypto purchases and transfers to protect customers from volatile digital assets. When asked about claims of hostility, Starling said it regularly reviews policies while regulators finalize crypto rules.
Meanwhile, UK Finance, representing more than 300 financial institutions, denied any sector-wide resistance to crypto. The group said it supports regulated stablecoins and crypto custody, while banks still must manage fraud risks.
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