UK Banks Block Crypto Transfers, Report Warns of Market Impact

A new industry report says most major UK banks are making it harder for people to move money to crypto exchanges. According to the findings, banks are widely blocking or limiting payments, even when customers use regulated platforms. Industry leaders warn that these practices are slowing growth and pushing innovation out of the country.

Most UK Crypto Exchanges Face Rising Payment Blocks From Banks, Report Says

A survey by the UK Cryptoasset Business Council (UKCBC) found that transfers between UK bank accounts and crypto exchanges are often blocked, delayed, or refused. Responses came from 10 of the UK’s largest centralized exchanges, which together serve millions of users and have processed hundreds of billions of pounds in transactions.

The report, titled Debanking the UK’s Digital Asset Economy, aims to replace anecdotal claims with data. UKCBC argues that current banking practices are becoming a major barrier for the sector and are already working against the UK’s goal of becoming a global center for digital assets.

Of the ten exchanges, eight reported a clear rise over the past year in customers facing blocked or limited transfers. None reported any improvement. Based on exchange data, UKCBC estimates that around 40% of transactions to crypto exchanges are either blocked or delayed by banks.

Simon Jennings, executive director of UKCBC, noted that fraud risks are real but said current responses go too far. He warned that many banks appear to be using compliance rules as a reason to restrict the sector rather than manage risk in a targeted way.

Exchange data paints a clear picture of how widespread the problem has become:

• Roughly 40% of attempted transfers to crypto exchanges face blocks or delays.
• Card payments and open-banking transfers are both frequently rejected.
• FCA-registered exchanges face similar restrictions as higher-risk platforms.
• Payment issues often occur without warning to customers.
• Delays can last days, disrupting trading and account access.

One UK-founded exchange reported close to £1 billion ($1.4 billion) in declined transactions over the past year. Rejections were linked mainly to bank-side blocks on card payments and open-banking transfers.

Survey Finds Inconsistent Bank Rules Blocking UK Crypto Transfers

Restrictions span most large high-street banks, many of which now apply strict limits or full blocks on transfers to exchanges. Some challenger banks allow payments but impose low caps or 30-day limits, which exchanges say still create friction for users.

UKCBC says nearly all major UK banks and payment firms rely on blanket policies rather than case-by-case assessments. These rules often fail to distinguish between exchanges registered with the Financial Conduct Authority and platforms considered higher risk.

Feedback from exchanges points to inconsistent restrictions, including blocks placed on fully registered UK firms. One exchange said 60% of its customers expressed frustration or anger over repeated payment failures. Another called banking limits “the single biggest problem” when launching or expanding crypto products in the UK.

UKCBC Calls on FCA to Curb Broad Bank Restrictions on Digital Assets

The report also flags a near-total lack of transparency. All surveyed exchanges said banks rarely explain why payments are blocked or accounts restricted, leaving both companies and customers without clear answers.

Issues raised by survey participants were consistent across platforms:

• Payment blocks applied regardless of exchange risk profile.
• FCA registration offering little practical protection.
• No clear timelines for resolving blocked transactions.
• Customer trust damaged by repeated payment failures.
• Product launches delayed or canceled due to banking limits.

UKCBC warns that the impact goes beyond inconvenience. According to the report, these practices are discouraging domestic innovation and encouraging firms to move operations abroad.

To address the problem, UKCBC calls on the government and FCA to state clearly that blanket bans are unacceptable. It urges banks to adopt more detailed, risk-based frameworks and ease restrictions for FCA-registered exchanges.

Jennings said progress depends on open discussion, adding that banks have so far shown little willingness to share fraud data or engage with the sector. He warned that if current practices continue, the UK risks falling behind in the global digital asset market.