• HSBC Holdings Plc and Nationwide Building Society have taken measures to limit retail customers‘ access to cryptoassets.
• Nationwide has implemented daily limits on debit card purchases and a reduced daily limit for specific account types.
• Regulators, including the IMF and FATF, have expressed concerns about the risks that come with buying crypto.
Banks 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 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. Card payments to major crypto exchange Binance have also been restricted and will be rejected – even with direct customer consent in person or by telephone.
Regulators, including the International Monetary Fund (IMF) and the Financial Action Task Force (FATF), have consistently cautioned banks against facilitating crypto purchases due to the perceived risks that cryptoassets may pose to the traditional financial system. The US Federal Reserve (Fed) also said financial institutions must be cautious of „potentially heightened liquidity risks“ that come with some sources of funding from crypto-related entities.
Other UK Banks Take Action
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., while many banks have limits related to crypto exchanges..
HSBC Holdings Plc and Nationwide Building Society’s decisions reflect their concerns about potential risks associated with buying cryptocurrency as well as other UK institutions tightening restrictions placed on these businesses.