Banks vs. Crypto: UK Investors Fight for Financial Freedom

A growing number of UK cryptocurrency investors are facing challenges in accessing and funding their accounts, as highlighted by recent surveys and industry concerns. An IG Group survey of 500 UK crypto investors and a broader sample of 2,000 adults found that 40% of users reported their banks had either blocked or delayed payments to crypto providers. This has led to a significant portion of investors switching banks or lodging complaints, with 35% and 29% of affected users, respectively, taking such actions. Michael Healy, IG’s UK managing director, criticized the situation, stating that it reflects anti-consumer and anti-competitive behavior from banks, which are operating in the absence of a clear regulatory framework governing crypto transactions [1].

The issue is compounded by the UK’s broader regulatory environment, where crypto companies must register with the Financial Conduct Authority (FCA) as virtual asset service providers to operate legally. However, several major UK banks, including Chase UK and NatWest, have imposed restrictions on crypto transactions under the pretext of fraud prevention. These restrictions have been criticized as overly broad and lacking public support, with 42% of UK adults opposing such interventions in crypto transactions [1].

In response to these banking barriers, the FCA recently took a step forward by lifting its four-year ban on retail trading of crypto exchange-traded notes (ETNs), effective Oct. 8, 2025 [4]. The regulator cited the maturation of the crypto market and the increasing familiarity of UK investors with digital assets as key reasons for this decision. Around 7 million UK adults, or 12% of the population, now own some form of cryptocurrency, up from 4% in 2021 [4]. The move aims to provide more investment choices while ensuring regulatory safeguards are in place.

However, broader regulatory and structural challenges remain. The UK is reportedly lagging in the global stablecoin race, with pound-denominated stablecoins accounting for just £461,224 in circulation compared to a $280 billion global market [7]. In response, 30 crypto industry executives, including representatives from Coinbase, Kraken, and Fireblocks, have urged UK Finance Minister Rachel Reeves to establish a national stablecoin strategy. They argue that the current regulatory framework treats stablecoins as risks rather than financial infrastructure and is hindering innovation and adoption. The proposed strategy would position stablecoins as tools to enhance financial services, generate revenue, and support the UK’s role as a global financial hub [7].

The call for a national strategy is supported by industry analysis suggesting that stablecoins are critical to the crypto ecosystem, serving as a bridge between traditional finance and digital assets. Daragh Maher, HSBC’s head of digital assets research, emphasized their role as the “cash equivalent” of crypto and their potential for facilitating fast cross-border transactions [7]. Despite these benefits, regulatory ambiguity and overly restrictive policies are seen as major obstacles to scaling stablecoin adoption in the UK.

Industry leaders have also highlighted the importance of a coordinated approach to address the growing complexity of crypto regulation. The FCA’s recent expansion of its crypto enforcement team, announced in 2025, reflects its intent to strengthen oversight and protect consumers from fraudulent actors in the sector [6]. While this move is expected to bolster market trust, it also adds to the compliance burden for legitimate crypto firms, which must navigate an evolving and often ambiguous regulatory landscape.

Critics argue that the UK’s slow progress in developing a cohesive strategy for digital assets risks further eroding its global financial standing. Former Chancellor George Osborne has warned that the UK is “falling behind in the crypto race,” a trend that could undermine its influence in the global financial services sector [1]. With the US and the EU moving ahead with clear stablecoin frameworks, the UK faces mounting pressure to catch up and avoid being sidelined in the rapidly evolving digital economy.

Source: [1] 40% of UK crypto users report blocked payments amid rise (https://cointelegraph.com/news/uk-banks-block-crypto-payments-investors-fall-behind) [2] UK targets sanctions circumvention and crypto networks exploited by Russia (https://www.gov.uk/government/news/uk-targets-sanctions-circumvention-and-crypto-networks-exploited-by-russia) [3] Bank payment blocked when buying crypto? Join 40% of UK (https://finance.yahoo.com/news/bank-payment-blocked-buying-crypto-150031340.html) [4] What does the FCA's new crypto ETN policy mean for retail investors? (https://uk.finance.yahoo.com/news/fca-crypto-etn-policy-retail-investors-bitcoin-050002277.html) [5] IIF Letter to BCBS, and supporting report, on re-evaluation of prudential standards for cryptoassets (https://www.iif.com/Publications/ID/6263/IIF-Letter-to-BCBS-and-supporting-report-on-re-evaluation-of-prudential-standards-for-cryptoassets) [6] The Financial Conduct Authority's Expansion of Its Crypto Enforcement Team in 2025 (https://khaledhawari.ca/the-financial-conduct-authoritys-expansion-of-its-crypto-enforcement-team-in-2025/) [7] Crypto firms urge UK to form national stablecoin strategy (https://www.cnbc.com/2025/08/20/crypto-uk-stablecoin-strategy.html) [8] UK risks being left behind in stablecoin boom, experts warn (https://sifted.eu/articles/stablecoin-rules-analysis) [9] Crypto execs urge UK to create national stablecoin strategy (https://www.mitrade.com/insights/news/live-news/article-3-1056114-20250821)