British banks reject cryptocurrency companies

• Banks in the UK put a series of obstacles in front of crypto companies which make it difficult for them to open bank accounts with them.
• These blocks range from a long red tape that plunges crypto companies into red tape, to account freezes.
• Cryptocurrency entrepreneurs now face a dilemma: the government is encouraging them to expand there, but lenders are turning their backs on them.

When Rishi Sunak took over as UK Prime Minister in October last year following the resignation of Liz Truss, the cryptocurrency ecosystem believed that with this leader the nation would become a crypto-friendly zone, but a series of events show otherwise.

According to an article in bloombergEnglish banks have been conducting a series of practices that make it difficult for cryptocurrency companies to open accounts, which range from a lengthy red tape that drowns crypto companies in paperwork, to freezing accounts.

Banks are trying to protect themselves

Although, during the cryptocurrency bull run, many banks saw a lucrative business affiliated with crypto companies, after all the scandal in 2022 that led to the disappearance of many crypto projects due to the fall of Terralabs projects (Luna y Terra) and the bankruptcy of a company on the stock exchange FTX, financial institutions decided to take a more conservative stance towards cryptocurrencies.

As Bloomberg points out Although cryptocurrencies were presented as an alternative to traditional finance, today they still need banks to act as a bridge between investors and cryptocurrency exchanges. So that they can exchange their fiat money for digital assets and also for the daily tasks of crypto companies, such as paying suppliers and workers. For this reason, the difficulties that banks place on cryptocurrency companies allow them to establish themselves in the country.

But since when did this blockade begin?

History of banks versus cryptocurrencies in the UK

Given the stigma that cryptocurrencies are used for money laundering, banks have maintained some caution towards the cryptocurrency sector.. Since 2019, there are records of how banks like Santander restrict user transactions to crypto companies, a bank finally announcing in November 2022 that by 2023 it would block all transfers to exchanges.

This was joined by some of the major UK banks such as HSBC Holdings Plc and NatWest Group Plc, who They restricted the amount of money their customers could transfer to the cryptocurrency exchanges.

Crypto companies are looking for solutions

Bloomberg interviewed dozens of UK crypto executives who have taken note The series of difficulties they face in order to open an account in banks, which range from “rejecting applications to burying in papers”.

According to Edouard Daunizeau, from SavingBlocks, there are not many options available to crypto companies, since traditional banks will not provide banking services to crypto companies, which has made companies look for alternatives such as looking for licenses in France, where they think so. It will be easier.

These barriers have enslaved them to the point that crypto entrepreneurs have turned directly to the government to ask for their help, Bloomberg reports, in the UK,”Cryptocurrency entrepreneurs now face a dilemma: the government is encouraging them to expand there, but lenders are turning their backs on them.”

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