Crypto-Friendly Banks in the UK

Cryptocurrencies continue to grow in popularity, although there are definitely some concerns around the industry

Updated: February 24, 2022
Crypto-Friendly Banks in the UK
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Cryptocurrencies continue to grow in popularity, although there are definitely some concerns around the industry.

As such, not every bank will allow its customers to trade in crypto. They don’t want to risk customers losing money, particularly if there’s a chance they end up being seen as liable for allowing it to happen.

As such, if you want to trade in cryptocurrencies then you may need to reconsider who you bank with. Let’s delve into the world of crypto and the UK banking scene, so you can fully understand the issues and the banks that are seen as crypto-friendly.

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Is crypto legal in the UK?

Cryptocurrencies are legal to own and trade in the UK. They aren’t currently classified as a currency, but instead are considered a property asset, even though there is no tangible asset to own.

Any UK-based crypto exchanges have to be registered with the Financial Conduct Authority, which oversees the industry to prevent any money laundering. The FCA is strict on demanding that any trading platforms must be able to demonstrate their compliance with anti-money laundering rules.

In 2021, the trading platform Binance was banned from taking part in any regulated trading within the UK for not being able to reliably show it would follow these rules, so it’s clear that the FCA isn’t afraid to act against cryptocurrency trading platforms.

Can you use cryptocurrencies in the UK?

There’s not a huge amount you can do with cryptocurrencies at the moment. No high street shops accept them as a form of payment, and only very specific businesses have considered the option.

For now, cryptocurrency is still mainly viewed as an investment product – a way of making money, rather than an actual usable currency for day-to-day life. Most of the 10 million people in the UK with some form of cryptocurrency are trading with it or holding onto it as an investment asset.

Which banks are crypto-friendly?

Here’s a rundown of some of the major banks in the UK that are good if you’re considering trading in cryptocurrencies:

Royal Bank of Scotland

Generally, RBS (and NatWest, which the bank also owns) is supportive of cryptocurrencies and trading. Customers usually don’t have an issue buying and selling crypto with either a debit or credit card. However the group does restrict access to some exchanges that are seen as being riskier, so you won’t have complete freedom.

Nationwide

Nationwide say that they have systems in place to prevent payments that are deemed suspicious or unusual for its members. They usually allow customers to use their debit or credit cards to make payments to crypto exchanges. If you have any problems, you should be OK to resolve them with the bank, so that you can access the trading platforms.

TSB

With TSB customers haven’t reported any problems in buying or selling on crypto platforms, unless they’re trying to make particularly large payments (which would be flagged with the bank regardless of whether it was crypto or something else). Splitting the payments into smaller amounts, or contacting TSB customer services, should resolve any issues.

Barclays

Barclays has an up-and-down history with crypto, having formed a partnership with Coinbase but then cancelled it in 2019. Despite this backtracking, the bank does generally allow payments to and from crypto exchanges, although there have been some reports of refused payments and even closed accounts. These tend to be in the minority but it’s one to be aware of.

Revolut

Revolut is one of the more expansive banking apps that offers trading of stocks and shares through its own platforms. It’s renowned for being positive in its approach to cryptocurrencies, and customers of the bank will have no problems dealing with exchanges, no matter which level of account they hold.

Monzo

Monzo has declared itself as a crypto-friendly bank, stating that customers can use their accounts to buy and sell through crypto exchanges. However, they do clarify that they will review exchanges and, if necessary, block access to some should they prove to be too risky.

Which banks aren’t crypto-friendly?

Lloyds Banking Group

The Lloyds Banking Group (including Lloyds Bank, Halifax, Bank of Scotland and MBNA) has blocked all credit card payments to crypto exchanges since 2018. In terms of debit card payments, it’s more hit-and-miss – sometimes the payment will sail through, and other times it will be flagged as fraud. One to probably avoid if you intend to trade regularly.

Starling

Starling officially has no policy preventing cryptocurrency exchange payments, although their international currency provider doesn’t support their purchase, and there may be other reasons why payments may be blocked. Customers have reported frozen accounts in the past, so another one to avoid.

HSBC

HSBC has previously claimed that it was friendly to crypto but now no longer supports deposits being made, and payments with debit and credit cards can sometimes be blocked. It’s not strictly unfriendly but there is more chance that your payments could fail or be flagged as fraudulent, so another bank may be a preferable choice.

FAQs

Which bank is best for cryptocurrency?

There’s no clear answer on which bank is best for cryptocurrency and banks’ systems and policies can quickly change. Royal Bank of Scotland is a government-backed bank that does permit payments, and so could be a safer option.

Do banks accept cryptocurrency?

Banks don’t accept cryptocurrency as a form of currency, so you can’t pay into your bank with crypto. Instead you’d need to sell your cryptocurrency and then transfer the proceeds from the sale to your bank, which is what a crypto exchange is used for.

However, many banks view crypto exchanges as risky, and so payments can be blocked in both directions. If you’ve made money from crypto and then want to cash out, make sure you’re with a bank that won’t hold up your money or refuse to accept the payment at all.

How will cryptocurrency affect banks?

Some people believe that decentralised currencies such as cryptocurrencies could kill off central banks, since people who used crypto wouldn’t need to use their banks in the same way and could get around banking fees.

In reality, the banks are some of the largest organisations in the world and they won’t let themselves be passed by in favour of digital currency. If it continues to grow in popularity then expect the banks to try to take ownership, or at least become more heavily involves, so that they retain their stake in customer finance.

Are cryptocurrency exchanges regulated?

All cryptocurrency exchanges operating in the UK must be registered with the Financial Conduct Authority and are regulated, meaning they must comply with the Money Laundering Regulations. However exchanges are not protected by any regulation scheme, so if you lose money on an exchange you wouldn’t be able to get it back. Crypto is still seen as a high-risk investment.

Will cryptocurrency replace flat currency?

Some major names in the finance industry have claimed that cryptocurrencies could (or will) replace flat currencies that already exist. But there’s no way of knowing this yet. How we bank will change as the world becomes more digital, but exactly how that looks is unclear for now.

Ian Lewis
Ian Lewis
Ian is an experienced writer with 15 years’ experience working in journalism and marketing. He’s worked in-house in financial institutions as well as writing freelance pieces for a variety of banking and financial trading websites.

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Comments

Nick Bell
June 10, 2022

Natwest wouldn\’t let me transfer £50 to Binance. Appalling!!

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