The United Kingdom's Financial Conduct Authority (FCA) wrote to the heads of the country's largest high-street banks in 2018 to emphasize the importance of due diligence when dealing with crypto businesses. This appears to have resulted in widespread high-risk ratings and bans on crypto-related banking, affecting both crypto businesses hoping to operate in the United Kingdom and investors.
Banks are understandably and responsibly concerned about scams, but the current situation creates uncertainty. Crypto investors must be able to move their money freely, and crypto businesses must have access to payment rails for a variety of reasons, including paying employees and suppliers.
Although crypto businesses struggle to open bank accounts and investors' freedoms are limited, nearly every major bank is interested in crypto. But only on one side of the bank. They're looking into whether crypto will work as an institutional investment, but that willingness and knowledge aren't making its way across the building to the people who do transactional banking — retail and corporate. You can't have your cake and eat it, too: the same issues will stymie crypto adoption as a form of institutional investment. Banks are being shortsighted by failing to translate interest in one area into meaningful processes in others, thereby harming all aspects.
For those interested in cryptocurrency, BCB, Revolut, Clear Junction, and ClearBank all provide banking relationships or U.K. bank accounts. The fact that a small number of PSPs can work with crypto businesses or investors without significant regulatory sanctions, a higher risk exposure than other organizations, and compliance teams comparable to major retail banks demonstrates that it is possible. Banks are failing to recognize the magnitude of this opportunity, which has already been successfully mined by a few organizations, to create a more competitive landscape.