Summary
- UK lawmakers want major banks to clarify whether FCA authorization will improve banking access for regulated cryptocurrency and digital asset firms.
- Britain’s crypto framework requires regulated firms to secure FCA authorization, with the wider regulatory regime taking effect in October 2027.
- The APPG inquiry examines banking restrictions affecting crypto businesses and will provide findings and recommendations to the UK government afterward.
UK lawmakers have pressed major banks to explain how they will treat crypto firms authorized under the country’s upcoming regulatory framework. Gurinder Singh Josan CBE MP and Lord Vaizey of Didcot sent a letter to major banks and banking service providers.
Both lawmakers co-chair the Crypto and Digital Assets All-Party Parliamentary Group, which is examining banking access across the crypto industry. Their letter asks lenders whether they currently provide accounts and other banking services to cryptocurrency and digital asset companies.
Additionally, banks must explain the regulatory, legal, compliance, commercial, and risk considerations influencing their policies toward these businesses. Lawmakers also requested details about restrictions imposed on crypto-related transactions involving retail customers or businesses.
Josan and Vaizey highlighted repeated reports of crypto companies struggling to secure banking services within the United Kingdom. Moreover, several banks have reportedly introduced restrictions affecting customers who make payments or transfers involving cryptocurrency platforms.
The lawmakers warned that limited banking access could become a major barrier to growth for Britain’s digital asset industry. Exchanges, custodians, wallet providers, payment companies, tokenization businesses, and stablecoin issuers could face difficulties under restrictive banking policies. Consequently, those barriers could weaken the effectiveness of Britain’s broader effort to establish a regulated domestic crypto market.
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FCA Authorization Could Reshape How Banks Assess Crypto Firms
The Financial Conduct Authority finalized its broader regulatory framework for cryptocurrency businesses in June. Under the framework, companies conducting regulated crypto activities must obtain authorization under the Financial Services and Markets Act. Applications will open on September 30 and remain available through February 28, 2027.
Meanwhile, the wider regulatory framework is expected to take effect on October 25, 2027. Significantly, lawmakers want banks to explain whether FCA authorization will materially change their assessment of individual crypto companies. They acknowledged that banks must address financial crime risks while maintaining appropriate consumer protections across their operations.
However, crypto businesses argue that lenders should assess each company’s risk profile instead of imposing restrictions across the entire industry. That position also reflects comments previously made by the UK government regarding regulated cryptocurrency companies.
Economic Secretary to the Treasury Lucy Rigby told Parliament that crypto firms will require FCA licenses for relevant regulated services. She also indicated that licensed firms should not face banking restrictions simply because they operate within the cryptocurrency sector. Hence, bank responses could show whether regulatory authorization will provide compliant crypto businesses with more reliable access to financial services.
Parliamentary Inquiry Examines Wider Banking Barriers
The APPG launched its broader inquiry into cryptocurrency banking access on July 21 to examine difficulties facing digital asset companies. Its investigation will assess the scale of banking restrictions and their effects on businesses operating across Britain’s crypto industry.
Furthermore, lawmakers want to identify factors influencing lenders’ policies and determine whether additional government intervention could become necessary. The parliamentary group is collecting evidence from banks, crypto businesses, and other relevant stakeholders through August 31.
Once evidence gathering ends, the APPG plans to present its findings and recommendations to the UK government. Ultimately, the inquiry will examine whether FCA authorization can address banking barriers alongside Britain’s wider regulatory framework for digital assets.
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