• HSBC and Nationwide Banks have taken measures to limit retail customers’ access to cryptoassets in response to the evolving legal and regulatory landscape.
• Both banks pointed to the Financial Conduct Authority (FCA) warnings about the risks that come with buying crypto as the reason behind their decisions.
• Other UK institutions have tightened restrictions placed on crypto-related businesses over the past few years, including Banco Santander SA, Lloyds Banking Group Plc, and Natwest Group Plc.
Regulator Warnings Prompt Banks to Limit Crypto Transactions
In response to the evolving legal and regulatory landscape surrounding cryptocurrency, HSBC Holdings Plc and Nationwide Building Society have taken measures to limit retail customers’ access to cryptoassets. This latest development highlights growing concerns and uncertainties faced by UK banks regarding use and trade of cryptocurrencies.
HSBC & Nationwide Take Action
Nationwide has released more details regarding their decision, stating that credit cards can no longer be used for crypto purchases; a daily limit of £5,000 ($6,000) has been set for debit card purchases; and a reduced daily limit of £100 ($120) has been implemented for accounts tailored towards young people under 23. Additionally, card payments to Binance – one of the major crypto exchanges – have been restricted. Even if customers give direct consent in person or over phone calls, this restriction cannot be removed. Withdrawals from Binance into Nationwide accounts are still allowed however.
Regulators Issue Warnings
Regulators such as the International Monetary Fund (IMF) and Financial Action Task Force (FAFT), have consistently cautioned banks against facilitating crypto purchases due to perceived risks that it may pose towards traditional financial systems. The US Federal Reserve also voiced out potential liquidity risks posed by some sources of funding from crypto-related entities. The Financial Conduct Authority (FCA) had also issued warnings about possible risks associated with buying cryptos which could be linked as one of many reasons behind these recent decisions taken by both HSBC & Nationwide Banks.
Other Institutions Follow Suit
Other UK institutions which have tightened restrictions placed on crypto-related businesses over the past few years include Banco Santander SA, Lloyds Banking Group Plc., Natwest Group Plc., among others. It appears that other banks are following suit in limiting access or implementing stricter rules when it comes to dealing with cryptocurrencies going forward – highlighting how uncertain future prospects remain for this industry until further regulations are put in place at an international level.
The recent moves taken by HSBC & Nationwide Banks indicate an increasingly cautious stance being adopted by financial institutions in relation to cryptocurrency trading activities – either through outright bans or through stringent limits/restrictions being imposed on customers’ access towards such digital assets due to worries over its potential risk factors within traditional finance systems worldwide.