The rise of crypto in the UK has been swift. Figures from the Financial Conduct Authority show that 4.97 million Britons, that is 9% of adults, have made an investment.
Bitcoin and Ether are the biggest cryptocurrencies, with both attracting a loyal following. But smaller digital assets — like Dogecoin — have also proven popular.
Major coins can be bought and sold on crypto exchanges, but some UK banks block their customers from using these platforms. Others have imposed strict spending limits.
Is crypto legal in the UK?
The short answer is yes. However, both the Bank of England and the FCA have repeatedly urged consumers to only invest what they can afford to lose.
While Bitcoin has had some extraordinary price spikes since launching in 2009, painful and sudden crashes have followed:
| Year | Bitcoin's returns |
| 2023 | +157% |
| 2022 | -64% |
| 2021 | +60% |
| 2020 | +305% |
| 2019 | +95% |
| 2018 | -74% |
| 2017 | +1,375% |
| 2016 | +120% |
| 2015 | +36% |
| 2014 | -58% |
This table illustrates what regulators are trying to say. Would you be harmed financially if your Bitcoin investment plunged by 74% in the space of 12 months?
While there's no law to prevent owning crypto, there are two important things to remember.
One is that you will need to pay capital gains tax on profits you make after selling digital assets — with HMRC keeping a very close eye on investors.
The other is that few retailers and merchants accept crypto as an online payment method, primarily because of how volatile it is.
UK crypto regulations and why the Bank of England wants ‘Bitcoin'?
The Conservative government under Rishi Sunak has been supportive of digital assets.
In April 2024, it unveiled plans to start regulating several crypto-related activities for the first time. As well as giving each crypto exchange clear rules to follow, and allowing them to look after customer funds, there will also be oversight of stablecoins. This type of cryptocurrency is designed to have a predictable value — and the biggest in the market, USDT, is pegged 1:1 with the dollar, meaning it's always worth $1.
Other new measures relate to staking, which is the act of locking up digital assets to receive rewards. The concept isn't dissimilar to an old-fashioned savings account where you're paid interest after stowing away funds for several years.
Separately, the Bank of England is currently examining whether it wants to launch a digital version of the pound. Informally known as “Bitcoin”, it would be hugely different to independent cryptocurrencies that fluctuate wildly in value. This Central Bank Digital Currency (CBDC) would have the same weight and status as a £1 coin or £10 note.
Benefits could include speeding up transaction times and cutting fees for small merchants. However, there are concerns that Bitcoin could render cash obsolete, put banks out of business, and even be used to snoop on the transactions we're making.
Best Crypto-Friendly Banks in the UK
1. Revolut Bank
The popular neobank has more than 6.8 million customers in the UK — and allows more than 150 types of cryptocurrencies to be bought and sold directly within its app. Revolut Bank is recommended for beginners looking to gain exposure to digital assets.
However, its transaction fees are high compared with crypto exchanges, with more competitive rates only available to customers on Revolut's most expensive plans.
2. Wirex
This digital payments platform positions itself as a banking alternative that offers many of the account features you'll see on the high street, with some crypto-specific differences.
Wirex offers a physical debit card that allows digital assets to be spent in major shops, with funds instantly converted to pounds at the checkout. Rewards are also offered after purchases are made in the form of “Cryptoback”.
3. Monzo
Monzo Bank declares itself as a crypto-friendly bank and enables its customers to transact with a range of major exchanges, including Coinbase. The company says it will block “a small number of transactions based on risk”, but this isn't specifically related to digital assets.
4. Lloyds Banking Group
Home to some of the UK's biggest financial institutions — including Lloyds Bank, Halifax and Bank of Scotland — Lloyds Banking Group also supports crypto transactions.
This includes Faster Payments, which allow large deposits and withdrawals to be made on the same day. However, the company does urge its customers to be cautious, as crypto scams rose by 23% in 2023.
5. Nationwide
The remaining banks in this list do allow crypto purchases, but have imposed limits designed to protect their customers.
For example, Nationwide Bank has imposed a cap of £5,000 a day — and this applies to debit card payments and bank transfers. Any transactions above this limit will be automatically blocked. No monthly restrictions are in force.
6. HSBC
HSBC Bank has a lower daily limit for buying cryptocurrencies which is set at £2,500. In addition, transactions are capped at a total of £10,000 over a rolling 30-day period.
This attempts to prevent victims from sending large amounts of cash to fraudsters — and also prevents accounts from being drained in the event of a security breach.
7. RBS and NatWest
NatWest Group, which brings together RBS and NatWest, has adopted a similar approach to HSBC. But these banks have much lower daily and monthly limits for crypto purchases — set at £1,000 and £5,000 respectively.
8. Santander
Santander Bank has especially tight restrictions and warns that “crypto activity is not regulated yet in the UK”, indicating its rules may be reviewed if the law changes.
Right now, payments to exchanges are capped at £1,000 per transaction, and a total of £3,000 per month. This applies to mobile, online and telephone banking, as well as payments made in branches.
Best Crypto-Friendly Banks Summary
| Provider | Score | Details |
|---|---|---|
| 1. Revolut | ★★★★★ | Learn more |
| 2. Wirex | ★★★★★ | Learn more |
| 3. Monzo | ★★★★★ | Learn more |
| 4. Lloyds Banking Group | ★★★★★ | Learn more |
| 5. Nationwide | ★★★★★ | Learn more |
| 6. HSBC | ★★★★★ | Learn more |
| 7. Royal Bank of Scotland / NatWest | ★★★★★ | Learn more Learn more |
| 8. Santander | ★★★★★ | Learn more |
Which UK banks do not allow cryptocurrency?
It's rare for British banks to completely ban digital asset purchases — but there are exceptions.
1. Chase
Chase Bank has two million customers and is run by JPMorgan. In October 2023, it was confirmed that all bank transfers and card payments to exchanges would be declined by default. However, withdrawals from crypto platforms are allowed.
2. TSB
TSB Bank was one of the first banks to impose a ban on crypto payments — and started prohibiting these transactions in June 2021. On its website, the company warns its customer service team are unable to override these restrictions.
Blanket bans on credit cards being used to invest in cryptocurrencies are more common, as financial institutions don't want customers getting into debt by buying volatile assets. This also applies to the crypto-friendly banks in our list above.
Which UK crypto-friendly bank allows huge bank transfers for crypto purchases?
Revolut has no limits on the amount of cryptocurrency that can be bought directly within its app — making it ideal for larger purchases.
However, the fintech platform does impose some daily and monthly limits on crypto withdrawals as a fraud prevention measure. This may prevent you from transferring digital assets to another address.
Wirex offers a maximum spending limit of €30,000 per month — meaning that, if you made a big €30,000 purchase of digital assets in a single transaction — you'd be unable to use your card for another 30 days.
Monzo allows its customers to make a bank transfer of up to £10,000 a day to crypto exchanges, and this limit is refreshed every 24 hours.
Halifax, Lloyds and the Bank of Scotland have the following daily limits for Faster Payments:
| Online | Up to £25,000 |
| In branch | Up to £250,000 with valid identification |
| By phone | Up to £25,000 |
Challenger vs traditional crypto-friendly banks
While newer “neobanks” and more traditional high street banks may both allow crypto purchases, there are differences between the two.
For one, newer fintech startups often enable their customers to have their pounds and digital assets within one account, while more old-fashioned institutions only allow you to transfer funds over to trading platforms.
Other features to look out for include:
- Crypto debit cards: These bits of plastic enable you to pay with digital assets anywhere Visa and Mastercard are accepted. An instant currency conversion will take place at the point of purchase, meaning the shop will receive pounds as normal.
- Staking: If you're planning on investing in cryptocurrencies for the long term (which comes recommended because of its volatility), staking means you can earn interest on digital assets. Some platforms payout rewards on a daily or weekly basis.
- Cold storage: Banks that specialize in cryptocurrencies allow their customers to hold digital assets in a secure environment that isn't connected to the internet, reducing the risk of it being stolen by hackers or scammers.
- Reduced transaction fees: Making international payments using digital assets can be faster and cheaper than through a conventional bank account.
It is important to stress that cryptocurrencies aren't covered by the Financial Services Compensation Scheme (FSCS). While savings in bank accounts of up to £85,000 are protected if a firm fails, this guarantee does not apply to digital asset firms at present.
How do crypto-asset transactions work?
Cryptocurrencies are held in crypto wallets and controlled by two keys.
The public key — a long string of letters and numbers — is the address that is used to send and receive digital assets.
Meanwhile, the private key acts like a PIN. Only someone who has access to a private key can sell crypto within a wallet.
Losing a private key can mean digital assets are irretrievable forever, and that's why many crypto exchanges look after coins on their customer's behalf.
The balance of every wallet is visible on a database known as the blockchain, which offers a tamper-proof and transparent record of past transactions, including when you buy cryptocurrency.
On the Bitcoin network, miners are responsible for adding a block of transactions to the blockchain every 10 minutes and are rewarded with newly minted coins for doing so.
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The role of digital wallets and crypto cards
Crypto wallets allow many different types of coins and tokens to be held in one place. Some platforms also offer an “on-ramp” so customers can top up their accounts with pounds, and enable swaps from one cryptocurrency to another.
Specialist apps can be downloaded for iPhones and Android devices, and it's worth adding another layer of security through two-factor authentication.
Crypto cards are helping tear down the barriers between digital assets and fiat currencies — allowing the likes of Bitcoin and Ether to be used for everyday purchases. However, some argue that these coins are too volatile to be used as a medium of exchange.
One man paid 10,000 BTC for two pizzas back in May 2010. That crypto is now worth hundreds of millions of dollars.
How has Brexit influenced the regulatory environment for crypto-friendly banks?
Since the UK's departure from the European Union, some politicians have argued that pro-crypto policies could deliver a “Brexit dividend” for the economy.
Both Britain and the EU are now taking divergent approaches to crypto regulation — and are working on their own central bank digital currencies.
Ministers have argued that imposing clear rules on crypto exchanges will result in greater protections for investors, especially following the sudden and shocking collapse of FTX, which was run by Sam Bankman-Fried. He has now been jailed for 25 years.
Businesses in this industry, especially in America, have also complained about a lack of regulatory certainty, and say they would welcome clear guidelines to follow.
The UK's friendlier stance towards the crypto sector could ultimately encourage some businesses to move their headquarters to London — creating the potential for job creation and higher tax revenues.
Predictions on the future of crypto banking in the UK
Cryptocurrencies are famed for their volatility, making their future difficult to predict. Major coins like Bitcoin are also decentralized, meaning no single individual or entity has control. However, developments we may see during the rise of crypto in coming years include:
- Mainstream banks allow consumers to invest in crypto directly from their account
- The development of a central bank digital currency being approved by the Bank of England
- Stablecoins being accepted as a mainstream payment method in British shops
- Financial institutions beginning to use blockchain technology to execute transactions — potentially reducing fees and waiting times
- Salaries paid in cryptocurrencies becoming more commonplace
While banks in some countries have started to roll out crypto-friendly features, an absence of well-defined regulations means banks here are reluctant to do the same. And it's fair to say that some might not want to, amid fears that it could undermine their business model.
The Bank of England has also warned that increased exposure to Bitcoin could jeopardize financial stability in the event of a market crash — and weaken its ability to control interest rates.
Crypto Banks Top Questions Answered:
Does Barclays accept crypto?
While Barclays doesn't allow its customers to purchase digital assets directly through their bank account, transfers can be made to an FCA-approved exchange to complete a transaction.
Back in 2019, the banking giant had actually entered into a high-profile partnership with Coinbase that made it easier for the platform's customers to deposit and withdraw pounds.
But less than a year after the pioneering deal was agreed, it was announced that Barclays had ended the partnership.
Why is Binance blocked in the UK?
Binance no longer has the ability to serve British customers — and that's why crypto-friendly banks block all transactions to this company.
The Financial Conduct Authority removed its licence to operate amid concerns that it was failing to comply with anti-money laundering regulations — and in October 2023, Binance formally suspended services in the UK.
Consumers are currently blocked from visiting the Binance website. While this exchange has been attempting to re-enter the British market with a new partner, the FCA has blocked these proposals.
In April 2024, Changpeng Zhao — Binance's former CEO and a key figure in the crypto space — was sentenced to four months in prison for allowing criminals to launder money through this exchange.
Countries around the world have taken similar action against this exchange — including Canada, China, Japan, Italy, the US and Australia.
How to Buy Crypto in the UK?
If you bank with Revolut, Wirex or PayPal, you can purchase digital assets directly from your account.
However, each platform only supports a specific number of coins.
As an alternative, you can open an account with a trading platform or exchange that specialises in cryptocurrencies — such as Coinbase, Kraken or eToro.
Major coins and tokens like Bitcoin, Ether and Solana are available 24 hours a day, seven days a week.
While a single BTC can be an expensive investment, this cryptocurrency can be divided into 100 million pieces, meaning it's possible to own a small fraction of one coin.
Some platforms allow you to establish standing orders via your bank, meaning that regular crypto purchases can be made on a weekly or monthly basis.
Before you select an exchange, make sure you perform research on the company's track record when it comes to security and ease of use.
And most importantly, never forget that cryptocurrencies are an extremely volatile asset — and you could end up losing a substantial amount of your investment.
