A cross-party group of British lawmakers, the Crypto and Digital Assets All-Party Parliamentary Group (APPG), has officially launched a parliamentary inquiry into banking access for the UK crypto industry. The inquiry comes just weeks after the UK finalized its new crypto regulatory framework.
A survey released by the UK Cryptoasset Business Council in January 2026 highlighted the issue, revealing that banks blocked or delayed roughly 40% of transfers bound for crypto exchanges. The fallout has been immediate: 70% of surveyed exchanges reported having to scale back investments, delay expansion plans, or freeze hiring in the UK. The report also named several banks restricting retail crypto transactions, including HSBC, Nationwide, NatWest, Santander, and Starling Bank.
The APPG inquiry is co-chaired by Lord Vaizey of Didcot - a former digital economy minister - and Labour MP Gurinder Singh Josan. Their focus centers on day-to-day operational hurdles: opening bank accounts, insurance denials, unilateral transfer caps, and payment blocking. The panel is tasked with evaluating whether these banking restrictions remain proportionate.
Seeking Lessons from Abroad
The UK is not alone in grappling with friction between digital innovation and traditional financial institutions. The APPG stated it will examine policy approaches adopted by the United States, Hong Kong, Australia, and the European Union for comparison.
Tensions abroad highlight how fraught this relationship can be. In the US, exchange Kraken recently secured a $22 million settlement from a former auditor that abruptly terminated services without warning. In Australia, Coinbase openly accused local banks of enforcing “unlawful bans” to stifle their operations.
The committee is accepting written evidence from the public and industry stakeholders until August 31. Once submissions are reviewed, the APPG will compile a report and release recommendations for the government. The timeline is tight: the Financial Conduct Authority (FCA) is scheduled to begin accepting authorization applications from crypto firms just a month later, on September 30.
Government Promises on the Line
Industry players are now holding the government to its past commitments. In March, Economic Secretary Lucy Rigby addressed parliament regarding compliant firms, asserting that the government does not expect FCA-licensed crypto entities to face banking restrictions simply due to the nature of their sector.
Yet blocking statistics reveal a starkly contrasting reality on the ground. UK crypto businesses need basic operational certainty before applying for licenses. A polished new legal framework means little if companies are still blocked from opening checking accounts or paying for employee insurance. The real test for the UK’s ambitions lies ahead: whether authorities can compel traditional banks to open their doors to the very industry they just regulated.
Reported by Decrypt.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
