• HSBC and Nationwide have reportedly barred customers from purchasing cryptocurrency via credit cards.
• Other leading British banks, such as Lloyds Banking Group Plc, Banco Santander SA, and Natwest Group Plc have also imposed restrictions on buying crypto assets.
• The stricter stance is a response to the numerous collapses in 2022 that led to multi-billion losses.
Leading UK Banks Implement Restrictions on Crypto Purchases
Several of the largest banking institutions in the United Kingdom are imposing new rules to restrict purchases of cryptocurrency. These include HSBC, the biggest bank in the country, and Nationwide Building Society. Both banks have barred their customers from using credit cards for crypto purchases and Nationwide has set a daily limit of £5,000 (nearly $6,000) for debit card transactions involving digital assets. Other major UK financial institutions including Lloyds Banking Group Plc, Banco Santander SA, and Natwest Group Plc have all implemented similar restrictions on buying cryptoassets.
Reason Behind Restrictions
This stricter stance towards digital assets is being taken as a response to several high-profile industry failures over the past year that resulted in billions of dollars in losses. This includes Terra/LUNA crashing in May followed by Three Arrows Capital (3AC) and Celsius Network declaring bankruptcy later that same year. The collapse of FTX – once valued at a whopping $32 billion – in November was perhaps one of the most notable examples that caused great economic damage throughout the crypto sector.
What Are These Restrictions?
Clients at Santander have been limited to £1,000 ($1,200) per transaction with an overall cap of £3,000 ($3,600) within any 30-day period when making purchases with cryptocurrencies via their debit cards or credit cards. Meanwhile HSBC customers are only permitted to buy digital tokens with debit cards but cannot use credit cards at all for such transactions due to “possible risks” associated with them. Likewise Nationwide has placed its own limits on how much can be bought each day using debit cards but has not allowed any form of cryptocurrency purchase using credit cards since June 2021.
Effects On The Crypto Industry
These tighter regulations could potentially make it more difficult for individuals who wish to invest in cryptocurrencies or engage with them for other purposes such as trading or speculation via online exchanges like Binance or Coinbase Pro given that they will now be restricted by these banking policies when attempting transactions with fiat currency (e.g GBP). Moreover this could lead some potential investors away from entering into this space altogether due to feeling unsure about how safe it is if they cannot rely on traditional financial services providers like banks anymore which could then lead to less liquidity overall within cryptocurrency markets globally due do lower levels of demand fuelled by these external factors outside its control.
The recent actions taken by some leading UK banks demonstrate just how far reaching global financial regulators are willing go when clamping down on activities related cryptocurrencies even though there has been no direct evidence linking these investments directly with any kind criminal activity.
Impact On Digital Assets
These restrictions may make it harder for people who want to invest in crypto or use them for trading etc., because they would now be limited by their access to traditional finance services like banks . It can also reduce liquidity available across global crypto markets due decreased demand resulting from such external factors beyond its control .