Major banks in the United Kingdom, HSBC Holdings and Nationwide Building Society, have reportedly decided to stop customers from buying cryptocurrency with their credit cards. This move joins a growing number of banking institutions across the country that are increasing their regulations on digital assets.
As per a Bloomberg report released on March 2, the step-back is in response to warnings from British regulators and issues that have been faced by the crypto industry. According to the report, Nationwide is placing a daily limit of £5,965 for buying crypto with a debit card while credit cards are not allowed to be used for these transactions.
Last month, HSBC clients had already been banned from purchasing crypto with their credit cards. “This is due to the potential risk to customers,” HSBC sent an email that was seen by Bloomberg. Both banks mentioned warnings from the Financial Conduct Authority (FCA) about the dangers related to crypto assets.
Other restrictions on crypto services in UK banks are being enforced by Santander, Natwest Group and Lloyds Banking Group. Most of the limits are being applied to crypto exchange platforms, which are also subject to more stringent examination from the FCA.
The UK banking sector is imposing stricter regulations on crypto firms, with reports emerging that two major banks, HSBC and Nationwide, are planning to ban customers from using their credit cards to purchase digital assets.
In August 2021, HSBC had already announced that it would be stopping credit card payments to Binance, citing concerns about the exchange’s regulatory status in the country.
The Financial Conduct Authority (FCA) recently proposed a set of rules that could see executives of crypto companies facing two years in prison if they fail to meet certain conditions related to advertising.
The FCA also stated that all crypto exchange providers, including crypto ATM operators, must be registered and comply with money laundering regulations.
A consultation paper was released to discuss the upcoming U.K. crypto regulations – the proposals seek to put the U.K. financial services sector at the forefront of cryptocurrency and avoid overly strict control measures. The document covers numerous topics such as algorithmic stablecoins and non-fungible tokens.