UK Lawmakers Press Banks Over Crypto Account Closures

In a significant development for the cryptocurrency sector in the United Kingdom, a group of cross-party lawmakers has formally written to the chief executives of major UK banks, demanding explanations for the continued refusal to provide banking services to crypto firms and individuals. The move, which comes amid heightened regulatory scrutiny and a rapidly evolving digital asset landscape in 2026, signals growing political pressure on the financial industry to address what critics describe as systemic 'de-banking' of the crypto sector. The letters, sent to heads of leading high-street and challenger banks, ask for detailed disclosures on the criteria used to assess crypto-related account applications. Lawmakers are particularly concerned about the disproportionate number of account rejections for legitimate cryptocurrency businesses, which they argue stifles innovation and drives activity overseas. This initiative follows similar parliamentary inquiries in 2025 that highlighted inconsistencies in how banks interpret anti-money laundering (AML) regulations, often leading to blanket refusals rather than risk-based assessments. A key focus of the correspondence is the perceived lack of transparency around the decision-making process. The MPs have requested data on the volume of crypto-related account applications received and rejected over the past 18 months, along with the specific compliance justifications cited. They have also called for evidence of how banks are implementing new Financial Conduct Authority (FCA) guidance issued in late 2025, which explicitly discourages 'blanket bans' on crypto clients and emphasizes a more nuanced, proportionate approach to risk. The banking industry, however, maintains that its cautious stance is warranted, citing the high risk of fraud, money laundering, and regulatory uncertainty associated with digital assets. In response, the UK Treasury and the FCA have been working on a comprehensive regulatory framework for crypto assets, which is expected to be fully in force by mid-2026. This framework aims to provide clarity for both banks and crypto businesses, potentially easing the current friction. Nevertheless, campaigners argue that until banks fully embrace the new rules, legitimate crypto companies will continue to face severe barriers to essential financial services, undermining the UK's ambition to become a global crypto hub. The lawmakers have given the banks a deadline of late February 2026 to respond, with a parliamentary hearing on the matter tentatively scheduled for the spring. The outcome of this exchange could have far-reaching implications for the future of crypto banking in the UK, potentially setting a precedent for other jurisdictions facing similar tensions between innovation and financial safety.

via Decrypt AI