The Crypto and Digital Assets All-Party Parliamentary Group has opened a formal review of the challenges facing cryptocurrency businesses in securing and maintaining banking relationships in the United Kingdom. The inquiry addresses longstanding complaints from the sector regarding account openings, closures, and limitations on payments involving digital assets.

Scope of the Parliamentary Review

Led by co-chairs Lord Vaizey of Didcot, a former digital economy minister, and Labour MP Gurinder Singh Josan, the group will gather evidence on how banks handle crypto-related activities. This includes refusals to open accounts, terminations of existing relationships, and restrictions such as blocked transfers or imposed limits on payments to crypto platforms.

The review extends beyond direct crypto firms to professional services providers like insurers that support the sector. Lawmakers aim to determine whether current banking practices are proportionate to perceived risks and evaluate their effects on consumers, competition, innovation, and overall economic growth.

Written submissions from banks, payment service providers, fintech companies, cryptocurrency firms, and other stakeholders are invited until August 31. The APPG plans to publish findings and policy recommendations afterward.

Industry Data Highlights Impact

A survey conducted by the UK Cryptoasset Business Council revealed significant operational friction. Ten crypto exchanges reported that banks blocked or delayed around 40% of transactions directed to crypto platforms. Additionally, 70% of responding businesses indicated that these restrictions had diminished their willingness to invest, expand operations, or hire within the UK.

Such barriers have raised questions about the UK's ability to position itself as a competitive hub for digital assets, particularly as the sector navigates evolving regulations.

Timing Aligns With Regulatory Progress

The inquiry arrives as the Financial Conduct Authority prepares to accept formal authorization applications from crypto firms starting September 30. It also precedes the full implementation of the UK's updated crypto regulatory framework, scheduled for October 2027.

Government officials, including Economic Secretary Lucy Rigby, have stated that regulated crypto businesses should not face blanket denials of financial services solely due to their sector involvement. The APPG's work will assess whether banking practices align with this stance and support the broader policy goals.

Broader Context and International Comparisons

Access to traditional banking remains a persistent issue for crypto companies globally, often linked to risk management, anti-money laundering requirements, and compliance burdens. In the UK, several major banks have applied varying degrees of scrutiny or restrictions to crypto-related flows.

The parliamentary group will examine approaches taken in other jurisdictions, including the United States, European Union, Hong Kong, and Australia, to identify potential best practices or lessons for domestic policy.

While the APPG lacks direct legislative authority, its recommendations could influence discussions among policymakers, regulators, and financial institutions as the UK advances initiatives in stablecoins, tokenized assets, and digital financial markets.

The outcome of this review may help clarify expectations for both banks and crypto businesses, potentially easing operational hurdles while maintaining necessary safeguards against financial crime.