It’s perfectly legal to buy and hold Bitcoin and other cryptocurrencies in the UK, but despite this, the nation’s banks are still wary about crypto.
If you’ve ever found that you’ve been blocked by your bank when you’ve tried to buy cryptocurrency with your debit or credit card or transfer funds to or from an exchange, then you’re not alone.
Many people have been presented with a failed transaction message when trying to transact with a cryptocurrency exchange and it’s difficult to know which banks are crypto friendly and who is banning this activity.
A recent example of a sudden clampdown happened when Barclays, HSBC, Santander and others suddenly halted deposits to and withdrawals from the Binance crypto exchange – one of the largest in the world.
The move followed a consumer warning by the Financial Conduct Authority (FCA) that Binance’s UK operations arm, Binance Markets Limited, was not permitted to undertake any regulated activity.
FCA warning issued over Binance activities
What many people failed to realise at the time was that this wasn’t a ban on Binance. The FCA’s statement related purely to the future activities of Binance Markets Limited which wasn’t even operating at the time.
However, The FCA did issue a warning over the Binance Group, the services offered and the risks in investing in cryptocurrency.
The fact that the FCA’s announcement was not an outright ban on Binance did little to prevent the major banks from taking punitive action against the exchange by blocking customers from using their funds to buy crypto on the platform.
Despite this and other measures by financial institutions to limit customers access to crypto, there are still a few banks that are crypto friendly in 2021.
Are there any crypto-friendly banks in the UK?
There are a number of banks and financial institutions in the UK that are supportive of cryptocurrency, and some actively encourage it.
A crypto-friendly bank can be defined as one that enables you to use your debit/credit card to buy crypto from an exchange and transfer cash back into your account after selling.
We’re also applying the definition that the bank must have a UK HQ to make it on to this list below.
Also, for a bank is to be considered crypto friendly it’s essential that it offers uninhibited movement of your cash to and from the crypto exchange of choice.
The following list features newer so-called challenger banks targeting a younger client base who are more plugged in to the world of crypto, together with some of the more traditional institutions.
This is one of the most crypto friendly banks right now because it enables customers to buy, sell and send crypto directly through their account.
The platform supports Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and XRP (Ripple) among others and offers a custodial service allowing you to store your crypto in your account.
Founded in 2015, Revolut is headquartered in London and prides itself on allowing customers to “go from cash to crypto, instantly”.
This London based challenger bank promises “one account for old & new money” but puts the emphasis firmly on crypto.
It offers access to not only cryptocurrency trading, but also Decentralised Finance (DeFi) products and the Non-Fungible Token (NFT) marketplace.
You can manage both your crypto and fiat money through Cashaa’s app, use a debit card globally and store your coins in the firm’s native crypto wallet.
The firm also operates its own token, known as CAS, which powers the Cashaa ecosystem and is listed on exchanges such as Binance, Kucoin and Pancake Swap.
>> Visit Cashaa
Xace could be categorised as a niche bank as much of its focus is on providing accounts centered around the gaming industry, ie for casinos and bookmakers.
However, it also offers a current account for “any use case”, according to its website, and is known to freely allow the flow of GBP to and from crypto exchanges while offering a virtual debit card.
With offices in London, Xace is perhaps a lesser-known bank. However, it’s registered with the Financial Conduct Authority.
>> Visit Xace
Edinburgh-based Orounda offers corporate accounts with the emphasis on flexible payment methods, including cryptocurrency.
It offers a range of fintech services, including designated corporate bank accounts with direct IBANS and prepaid debit cards.
While not suitable for individuals looking for a cryptocurrency friendly bank, this may be an option if you run a business and wish to transact in crypto.
The Big Four
When it comes to traditional high street banks in the UK, ‘the big for’ are generally categorised as Barclays, Lloyds Banking Group (including Halifax, Lloyds Bank and the Bank of Scotland), HSBC and NatWest (including Ulster Bank).
How friendly they are towards crypto is a moveable feast while regulators mull over the future of digital currencies.
It seems that some accounts will let you deal with some exchanges, while others have blocked specific platforms – ie Barclays and HSBC blocking Binance, together with Santander.
Despite this decision, Barclays still allows customers to move funds to and from other exchanges, Coinbase being one.
Banks that have banned crypto
Other banks have banned cryptocurrency transactions altogether at the time of writing, including Lloyds, HSBC, Santander, Metro Bank, TSB and Monzo.
Nationwide Building Society has taken a similar stance to many of the others when it comes to banning Binance transactions.
However, according to the Nationwide website, there are currently no restrictions in place on other crypto exchanges, although this is being regularly reviewed.
One of the main hurdles for banks is that cryptocurrency remains largely unregulated and they’re unlike to welcome digital currencies until this changes.
Money laundering, cryptocurrency and banks
Another issue with cryptocurrency that’s concerning financial regulators is it’s use by criminals to move funds around the globe without being detected.
The perceived anonymous nature of Bitcoin (even though it isn’t), and its association with illegal dark web activities and, increasingly, mainstream criminals, has led to crypto exchanges tightening up on their AML/KYC procedures to keep the regulators happy.
That said, given the many high-profile cases of banks helping to launder millions, if not billions, on behalf of criminals, it seems ironic that they should take such a prudish approach to crypto.
Whether their reticence to bring crypto into the fold is born out of a genuine concern for clients or an existential fear that their future it under threat is a matter for debate.
Adam is the founder of The Crypto Adviser which offers experts guides and reviews on all things related to Bitcoin and cryptocurrency.
Adam is Diploma for Financial Advisers (DipFA) Level 4 qualified, a Member of the London Institute of Banking and Finance (MLIBF), and has worked for many years as a journalist and PR consultant, having studied with the National Council for the Training of Journalists (NCTJ).