Actions taken by UK banks to restrict customer access to crypto are “not in the spirit of consumer protection,” Circle’s European policy lead said at an event last week.
Amid concerns that crypto firms are facing difficulties accessing banking services in the UK, Teana Baker-Taylor said individual customers were also being affected.
“One thing I think that is pretty clear is the UK banks are now actively unbanking people, not just companies,” Baker-Taylor said during a panel discussion at Citi's Digital Asset Symposium. “It's not about just refusing to give bank accounts to companies,” she said, claiming that banks were unbanking individuals because of their decision to buy “crypto assets that are perfectly legal.”
“Then your bank turns you off,” she said. “That, to me, feels very, very wrong, and not in the spirit of consumer protection. It feels very patriarchal.”
Are UK banks “unbanking” crypto users?
While there is no evidence of a UK bank shuttering a customer’s account altogether on account of crypto usage, there are several recorded instances of users facing temporary freezes on their accounts when trying to buy crypto.
Banks have publicly detailed their policies, which include limits on how much can be transferred at once, and even blanket bans on transfers into crypto.
In February, Alison Rose, the chief executive of one of Britain’s so-called ‘big four’ banks, NatWest Group, told politicians the bank had taken a “hard line” on cryptocurrencies.
“We're blocking retail and wealth customers from transferring into crypto assets because of the volatility and the stability of the platform,” she said at a meeting of Parliament’s Treasury Select Committee.
Santander, a Spanish bank with a major presence in the UK, last year limited transactions to crypto exchanges to just £1,000 ($1,234), while Nationwide put in a £5,000 limit on card payments to crypto assets last month. NatWest soon followed suit, introducing restrictions of £1,000 a day and £5,000 over a 30-day period.
The situation prompted Su Carpenter, director of Operations for industry body CryptoUK (where Baker-Taylor serves as a non-executive director), to write to the Treasury in March, warning that without action the banking industry’s cautious approach could undermine the UK government’s crypto ambitions.
Banks generally cite the risk of fraud in their policies limiting how customers can use crypto, but Baker-Taylor argued that “all of those things happen equally in the traditional finance ecosystem.”
Circle has had its own troubles with the world of traditional finance. Its USDC stablecoin briefly broke its peg to the U.S. dollar last month after it revealed that $3.3 billion of its reserves were stuck at the failed Silicon Valley Bank.
“It’s somewhat ironic that there has been a lot of talk of protecting the banking system from crypto, here we are in a situation where we are trying to protect a digital dollar from the banking system,” Circle’s CEO Jeremy Allaire said in a CNBC appearance in the days following the crisis.