A new study by the UK Cryptocurrency Business Council (UKCBC) has found that transfers between UK bank accounts and crypto exchanges are frequently blocked, delayed or rejected, even when customers are trying to use regulated platforms.
The study, titled ‘Lockout: Debanking the UK’s digital asset economy’, draws on responses from 10 of the UK’s largest centralized exchanges. Together these exchanges serve millions of UK consumers and process hundreds of billions of pounds of transactions.
The aim is to translate anecdotes into hard numbers about how current banking practices are impacting the banking sector. UKCBC argues that extensive regulation is a major impediment to growth and is already undermining the UK’s ambitions to become a major hub for digital assets.
According to the survey, 8 out of 10 exchanges reported a significant increase in the number of customers whose money transfers were blocked or restricted over the past 12 months, and no exchanges saw a decrease.
How difficult is it to move money?
Based on exchange data, UKCBC estimates that 40% of transactions to crypto exchanges are blocked or delayed by the bank in question.
Simon Jennings, executive director of UKCBC, told Cointelegraph: “We acknowledge that fraud is a legitimate concern and we want to proactively work towards resolving it. However, there is growing concern within the industry that banks are substituting a posture of compliance to hinder industry growth.”
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One major exchange established in the UK observed a drop in UK transactions of nearly £1 billion ($1.4 billion) over the past year due to banks rejecting card payments and Open Banking transfers.
This pattern spans a wide range of providers, with many of the largest mainstream banks now imposing strict limits or blocks on both bank transfers and card payments to exchanges, while some challengers are allowing payments but with strict caps or 30-day limits.
Lack of comprehensive policies and transparency
UKCBC highlights that almost all major banks and payments companies in the UK are currently imposing blanket trading restrictions or outright blocks on crypto asset exchanges, without distinguishing between UK companies registered with the Financial Conduct Authority and high-risk platforms.
Qualitative feedback from exchanges highlighted inconsistent restrictions “even for FCA-registered companies” driven by overarching policies rather than evidence-based risk assessments.
Mr Jennings said engagement with UK exchanges showed that “payment blocks and restrictions apply universally” and that the FCA’s registration “does not prevent these restrictions at this time”.
The report also points to an almost complete lack of transparency around these decisions, with 100% of exchanges surveyed saying banks do not provide clear explanations about payment blocks and account restrictions, leaving businesses and their customers “in the dark”.
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One exchange cited in the report said 60% of customers had expressed anger at the resulting friction, while another said bank-imposed restrictions and bans were the “single biggest problem” in growing or launching new crypto products in the UK.
UKCBC recommendations
For UKCBC, the concerns go beyond consumer inconvenience. The report concludes that anti-competitive debanking practices “undermine innovation at home and foster competition abroad.”
The report recommends that the government and the FCA make clear that a blanket ban is unacceptable and require banks to adopt a more granular risk-based framework that distinguishes between different exchanges and removes unnecessary friction for FCA-registered companies.
Jennings said “constructive dialogue” is an important first step, but so far “banks have not engaged meaningfully and have been reluctant to share data on the level of fraud.” He added: “If the UK is to lead the global race, we cannot continue in this situation.”
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