Teana Baker-Taylor, the European policy lead for Circle, a stablecoin provider, has criticized UK banks for actively limiting customer access to cryptocurrencies, which she believes is “not in the spirit of consumer protection.” At a Citi Digital Asset Symposium panel discussion last week, Baker-Taylor claimed that banks are now “actively unbanking people, not just companies,” and are refusing bank accounts to individuals because of their decision to buy “crypto assets that are perfectly legal.”
While there is no evidence of UK banks shuttering accounts altogether, temporary account freezes have been reported when customers attempt to purchase crypto. Banks have publicly detailed their policies, which include limits on how much can be transferred at once, and even blanket bans on transfers into cryptocurrencies.
In February, Alison Rose, the chief executive of one of Britain’s ‘big four’ banks, NatWest Group, told politicians the bank had taken a “hard line” on cryptocurrencies. “We’re blocking retail and wealth customers from transferring into crypto assets because of the volatility and the stability of the platform,” she said at a meeting of Parliament’s Treasury Select Committee.
Last year, Santander, a Spanish bank with a major presence in the UK, limited transactions to crypto exchanges to just £1,000 ($1,234), while Nationwide put in a £5,000 limit on card payments to crypto assets last month. NatWest soon followed suit, introducing restrictions of £1,000 a day and £5,000 over a 30-day period.
Baker-Taylor’s comments follow the warning from Su Carpenter, the director of Operations for industry body CryptoUK, who wrote to the Treasury in March, warning that without action, the banking industry’s cautious approach could undermine the UK government’s crypto ambitions.
While banks generally cite the risk of fraud in their policies limiting how customers can use crypto, Baker-Taylor argues that “all of those things happen equally in the traditional finance ecosystem.” Circle, meanwhile, has had its own troubles with the traditional finance world. Its USDC stablecoin briefly broke its peg to the US dollar last month after it revealed that $3.3 billion of its reserves were stuck at the failed Silicon Valley Bank.
“It’s somewhat ironic that there has been a lot of talk of protecting the banking system from crypto; here we are in a situation where we are trying to protect a digital dollar from the banking system,” said Circle CEO Jeremy Allaire in a CNBC appearance in the days following the crisis.