• HSBC Holdings Plc and Nationwide Building Society have limited retail customers’ access to cryptoassets due to legal and regulatory concerns.
• Credit card purchases of crypto are no longer allowed, while debit cards have daily limits set at £5,000 ($6,000).
• Other UK institutions such as Banco Santander SA, Lloyds Banking Group Plc, and Natwest Group Plc have also tightened restrictions on crypto-related businesses.
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 highlights the growing concerns and uncertainties faced by UK banks regarding the use and trade of cryptocurrencies.
Nationwide has released more details regarding their decision to limit access to cryptoassets. Credit cards can no longer be used to make crypto purchases with a daily limit on debit card purchases set at £5,000 ($6,000). Additionally, a reduced daily limit of £100 ($120) has been implemented for a specific account type tailored for young people under the age of 23. Payments made towards cryptocurrency exchanges will be rejected even with direct consent in person or by telephone. Users can still withdraw money they have with Binance into their Nationwide accounts.
Risk Warnings from Regulators
Regulators including the International Monetary Fund (IMF) and Financial Action Task Force (FATF) have consistently cautioned banks against facilitating crypto purchases due to perceived risks that may pose to the traditional financial system. The US Federal Reserve (Fed) also said financial institutions must be cautious of “potentially heightened liquidity risks” associated with sources of funding from crypto related entities.
Other UK Institutions Tighten Restrictions
Other UK institutions such as Banco Santander SA, Lloyds Banking Group Plc, and Natwest Group Plc have also tightened restrictions placed on crypto-related businesses over recent years.
The actions taken by HSBC Holdings Plc and Nationwide Building Society demonstrate how seriously banks are taking the warnings issued by regulators about the possible risks associated with trading in cryptocurrencies. It is likely that other banks in the UK will follow suit in tightening regulations surrounding cryptocurrency transactions in order protect customers from potential losses or fraudulent activities associated with this new asset class