U.K. Prime Minister Rishi Sunak’s cryptocurrency plans have reportedly hit some snags.
As Bloomberg News reported Sunday (April 2), crypto companies were already dealing with pushback from big British banks like HSBC and NatWest, which in February put limits on the amount of money customers in the U.K. can transfer to digital asset exchanges.
Now, crypto firms say they’re running into new banking difficulties, such as rejected applications to excess paperwork, leading the companies to petition the government for help.
“There aren’t many options available — most traditional banks won’t offer banking services to crypto firms,” Edouard Daunizeau, CEO of the London-based crypto investing company SavingBlocks, said in an interview with Bloomberg.
“With the recent string of events it will be even tougher. We are seeking licenses in France where we think it will be easier.”
The U.K. government last year announced plans to make the country a “global hub” for cryptocurrency companies.
While the country has had three leadership changes since then, Sunak’s elevation to prime minister in October 2022 was greeted with enthusiasm among crypto enthusiasts because of his support for the “hub” plan in his time as chancellor.
However, a lot has happened in the digital asset sector since then, including the downfall of FTX, the collapse of two crypto-friendly banks, and an increase in regulatory pressure on Binance, the world’s biggest cryptocurrency exchange.
In March, HSBC and Nationwide Building Society announced a ban on cryptocurrency purchases using credit cards for their retail customers, while also creating tougher restrictions on debit-card purchases of crypto to a daily limit of $6,000.
And despite Sunak’s support for the industry, the country’s financial watchdog — the Financial Conduct Authority (FCA) has for years labeled crypto as high risk, even threatening crypto executives with jail time if they break certain rules.
“The cryptocurrency sector has yet to pull the proverbial magic rabbit from its top hat,” PYMNTS wrote in March. “The audience, having purchased tickets to the show, are now realizing they may leave empty-handed as their hard-earned money pulls a disappearing act.”
Instead of revolutionizing the financial world the way the technology’s advocates promised, the industry has instead been rocked by “bad actors and back-door platforms, leaving its future more uncertain than ever.”