• In response to the evolving legal and regulatory landscape surrounding the crypto industry, HSBC Holdings Plc and Nationwide Building Society have taken measures to limit retail customers‘ access to cryptoassets.
• Both banks pointed to the Financial Conduct Authority (FCA), which had issued warnings about the risks that come with buying crypto.
• Other UK institutions have tightened restrictions placed on crypto-related businesses over the past few years, including Banco Santander SA, Lloyds Banking Group Plc, and Natwest Group Plc.
Regulator Warnings Prompt Banks to Limit Crypto Transactions
In response to the evolving legal and regulatory landscape surrounding the crypto industry, HSBC Holdings Plc and Nationwide Building Society have taken measures to limit retail customers‘ access to cryptoassets. This latest development highlights the growing concerns and uncertainties faced by UK banks regarding the use and trade of cryptocurrencies.
Nationwide’s Restrictions on Crypto Assets
Nationwide has recently released more details regarding their decision to limit access to cryptoassets. As per their announcement, credit cards can no longer be used to make crypto purchases and daily limits on debit card purchases have been set at £5,000 ($6,000). Additionally, a reduced daily limit of £100 ($120) has been implemented for a specific account type tailored to young people under the age of 23.“These will apply where we identify payments to crypto exchanges,“ it said, adding:“These limits apply any time you use your card to make a payment. That includes using a digital wallet, such as Apple Pay or Google Wallet.“Additionally, card payments to the major crypto exchange Binance have been restricted and will be rejected – which follows „similar action from other providers“, adding that „even with your direct consent in person or by telephone, we can’t remove the restriction and allow you to make a payment to Binance.“ Users can, however, still withdraw money they have with Binance into their Nationwide accounts.
Reasons Behind These Decisions
As for why these decisions were made by both banks point back towards Financial Conduct Authority (FCA), which had issued warnings about potential risks associated with buying cryptocurrencies. Regulators including International Monetary Fund (IMF) and Financial Action Task Force (FATF) also cautioned banks against facilitating crypto purchases due its perceived risk factor it may pose towards traditional financial system
UK Institutions Implementing Restrictions
Other UK institutions have tightened restrictions placed on cryptocurrency-related businesses over recent years too; this includes Banco Santander SA ,Lloyds Banking Group Plc.,and Natwest Group Plc.. The US Federal Reserve has also commented upon taking extra caution while handling sources of funding from cryptocurrency related entities in order avoid any heightened liquidity risks that may arise out of it.
Conclusion
It is clear that there is an increasing pressure among authorities all around world regarding regulation framework concerning cryptocurrencies in addition due its volatile nature prompting many financial institutes all around world precautionary steps when dealing with cryptocurrency based transactions .