Top UK Bank Will Not Process Bitcoin Transfers from Exchanges
A recent report from The Times revealed that HSBC, one of the largest banks in the UK, was barring bitcoin holders from cashing out their gains. The report added that some of Britain’s largest banking institutions refused to accept credit cards for crypto purchases.
This blatant anti-crypto stance from banks only adds to hassle for holders who wish to take advantage of bitcoin’s record-breaking rally. One user commented that banks’ failure to process digital asset payments would result in users seeking other avenues such as PayPal to liquidate their holdings.
Ran Neuner, the host of CNBC’s Crypto Trader, weighed in on the discussion, warning that many banking institutions risk putting themselves out of business by banning crypto.
Ironically, banks such as HSBC that cite money laundering concerns as the primary reason for their reluctance to deal in crypto have themselves helped criminals launder over $2 trillion. This disclosure stemmed from damning FinCEN files that leaked online in September of 2020.
UK Banks Actions Amounts to Financial Discrimination
According to Scott Snaith, CEO of 50cycles, banks’ failure to process crypto payments amounts to pure ‘financial discrimination.’ Snaith, who invented an electric bike that mines cryptocurrency, experienced anti-crypto bias from HSBC and Barclays after the two banks froze his accounts due to crypto-related activities.
Many more crypto users have voiced their frustration over the refusal of HSBC to allow customers to liquidate their bitcoin, especially at a time when the top crypto is posting fresh highs.
Many traditional banks currently view bitcoin and other crypto-assets as threats that could end their financial sector relevance. However, one Twitter user forecasts that these institutions will soon be forced to embrace the nascent digital asset class or run out of business.
“I predict the same banks will be begging people to use their “Bitcoin services” in the not too distant future,” the crypto enthusiast tweeted.
Is Crypto Regulation the Solution?
A viable solution to end banks’ hostility toward digital assets is to have more crypto businesses improve transactions’ transparency by seeking approval from regulators.
Coinbase took a step toward this direction by becoming the first exchange for opening an account with British Bank Barclays in 2018, per a CNBC report. Britain’s Financial Conduct Authority (FCA) announced at the time that it would grant Coinbase an e-money license to introduce an element of trust in the exchange’s crypto dealings.
Meanwhile, the FCA has ramped up efforts to protect UK citizens from investments in crypto assets that falsely promise high-profit margins. In a Jan 11 press release, the UK financial watchdog issued a warning about the potential risks involved in crypto investments, including price volatility, product complexity, and overstated returns.