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Banks say that their recent decisions are in line with the guidelines of the Financial Conduct Authority (FCA) on customer protection.
HSBC Holdings and Nationwide Building Society are the latest banks to take steps in line with the recent warnings of the United Kingdom (UK) related to the crypto industry. The two banks have banned retail customers from purchasing cryptocurrency with the use of their credit cards.
HSBC, Others Cite Crypto Regulatory Conditions
It is noteworthy that their move reflects the general situation in the UK, at least as far as banks are concerned with crypto. According to a recent Bloomberg report, banks are being cautious so as not to be caught on the wrong side of the law.
Recall that UK regulators have issued strict warnings recently amid growing concerns about the crypto industry. Even more so, as scandals continue to rock the industry on a global scale.
To this effect, Nationwide is reportedly introducing daily limits of 5,000 British pounds ($5,965) on debit-card purchases of crypto assets. But in addition, the bank has outrightly banned the use of credit cards for crypto transactions.
Similarly, HSBC also banned its customers from credit card-based crypto purchases in February. At the time, the bank also claimed that the move was to protect customers from risks associated with crypto assets. Meanwhile, both banks are claiming that their recent decisions are in line with the guidelines of the Financial Conduct Authority (FCA) on customer protection.
Crypto Regulation in the UK
Authorities in the UK are taking no chances with crypto firms, hence, their consistent crack down on such firms. In February, the FCA proposed a set of rules that could see executives of crypto firms bag up to two years in prison. That is if they are found wanting in certain aspects of their business such as promotion. At the time, the FCA wrote:
“Cryptoasset businesses marketing to UK consumers, including firms based overseas, must get ready for this regime.”
The FCA was also clear that all crypto exchange providers and crypto ATM operators must be duly registered. And on top of that, they comply with its anti-money laundering (AML) laws.
For what it’s worth, however, a consultation paper has been released for UK’s upcoming crypto regulation. And according to its content, the UK is seeking to place its financial services sector at the forefront of crypto. However, in addition, it is also seeking to avoid strict control measures on crypto so as not to stifle innovation.
HSBC and Nationwide now join a long list of other banks in the UK with restrictions on crypto services. Some of the others are Santander, Natwest Group, and Lloyds Banking Group.