Circle VP: UK Banks ‘Actively Unbanking People, Not Just Companies’ Over Crypto

Actions taken by UK banks to limit customers’ access to crypto are “not in the spirit of consumer protection,” Circle’s European policy director said at an event last week.

Amid concerns that crypto firms are having trouble accessing banking services in the UK, Teana Baker-Taylor said individual customers were also affected.

“One thing I think is pretty clear is that the UK banks are now actively removing banks, not just companies,” Baker-Taylor said during a panel discussion at Citi’s Digital Asset Symposium. “It’s not about simply refusing to give bank accounts to companies,” she said, claiming that banks were foreclosing on individuals because of their decision to buy “crypto-assets that are completely legal.”

“Then your bank will cut you off,” she said. “That, to me, feels very, very wrong, and not in the spirit of consumer protection. It feels very patriarchal.”

Are UK banks ‘unbanking’ crypto users?

While there is no evidence that a UK bank has closed a customer’s account entirely due to crypto use, there are several recorded cases of users facing temporary freezing of their accounts when trying to buy crypto.

Banks have publicly detailed their policies, which include limits on how much can be transferred at once, and even blanket bans on crypto transfers.

In February, Alison Rose, chief executive of one of Britain’s so-called ‘big four’ banks, NatWest Group, told politicians that the bank had taken a “hard line” on cryptocurrencies.

“We are blocking retail and wealth clients from transferring to crypto-assets because of the volatility and stability of the platform,” she told a meeting of parliament’s treasury select committee.

Santander, a Spanish bank with a large presence in the UK, last year limited transactions to crypto exchanges to just £1,000 ($1,234), while Nationwide put a £5,000 limit on card payments for crypto assets last month. NatWest soon followed suit, introducing restrictions of £1,000 per day and £5,000 over a 30-day period.

The situation prompted Su Carpenter, director of operations for industry body CryptoUK (where Baker-Taylor serves as a non-executive director), to write to the Treasury in March warning that, without action, the banking industry’s cautious approach could undermine UK government crypto. ambitions.

Banks generally cite the risk of fraud in their policies limiting how customers can use crypto, but Baker-Taylor argued that “all these things happen equally in the traditional financial ecosystem.”

Circle has had its own problems with the traditional financial world. It is USDC stablecoin briefly broke its peg with the US dollar last month after it revealed that $3.3 billion of its reserves were stuck in the failed Silicon Valley Bank.

“It’s kind of ironic that there’s been a lot of talk about protecting the banking system from crypto, here we are in a situation where we’re trying to protect a digital dollar from the banking system,” Circle CEO Jeremy Allaire said in a CNBC appearance in the days after the crisis.