UK Banks Face Parliamentary Grilling Over Crypto Account Denials and Payment Limits

Two senior UK lawmakers wrote directly to the chief executives of major banks and financial service providers on August 11, demanding answers about why crypto firms keep getting shut out of basic banking services. The letter came from Gurinder Singh Josan MP and Lord Vaizey of Didcot, who co-lead the Crypto and Digital Assets All-Party Parliamentary Group — the APPG — and it wasn’t a gentle nudge. It asked for clarity on current bank policies toward crypto companies and whether those policies would change once a new regulatory framework lands.

The APPG has been hearing the same complaints repeatedly. Crypto businesses across the UK — exchanges, custodians, payment firms, wallet providers, tokenization outfits, stablecoin issuers — say they can’t open bank accounts, or they open them and then hit payment caps and transaction restrictions that make normal operations basically impossible. The group launched its formal inquiry on July 21, and it covers the full scope of the problem: how widespread it is, what it’s doing to investment flows into the sector, and whether the government or regulators need to step in harder. Written evidence is being collected until August 31.

Not a small ask.

What the Lawmakers Actually Want From Banks

The APPG isn’t just asking banks to explain themselves. It’s also asking them to identify the specific regulatory, legal, compliance, and risk factors that shape how they treat crypto firms — and to suggest what policy changes might actually fix the problem. That’s a broader mandate than a typical parliamentary letter. Banks are being asked to do some of the policy thinking themselves, which is either smart or optimistic, depending on how you read it.

The group’s core argument is pretty straightforward: if the UK is building a new regulatory regime meant to legitimize and grow the digital asset sector, then authorized firms operating under that regime shouldn’t face blanket banking bans. Economic Secretary to the Treasury Lucy Rigby had already said as much — FCA-authorized crypto firms, per her earlier statement, shouldn’t face banking restrictions just because of the sector they’re in. The APPG is essentially asking banks why that’s still happening anyway.

The lawmakers do acknowledge that banks have real obligations. Anti-money laundering rules, consumer protection requirements — those aren’t going away, and the APPG isn’t asking banks to ignore them. But there’s a difference between applying those rules carefully, based on the individual risk profile of a specific firm, and just refusing whole categories of business. The group wants to know whether banks can shift toward that more granular approach, especially once licensed crypto companies are operating under formal FCA oversight.

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Stakes for the UK’s Crypto Ambitions

The UK has been pretty vocal about wanting to be a global hub for digital assets. That’s the stated goal. But ambition and execution are two different things, and if licensed firms can’t get bank accounts, the whole framework probably won’t work the way anyone intends. Lawmakers seem genuinely worried about that gap. It’s one thing to pass rules that legitimize an industry. It’s another to make sure the financial infrastructure actually supports it.

Stablecoin issuers and tokenization businesses are probably the most acutely affected here. Those models depend on fast, reliable banking relationships — not accounts that get frozen or capped at arbitrary limits. Payment firms face similar pressure. And custodians, who hold client assets and need clean settlement rails, can’t really function if their banking access is unreliable or conditional on factors that shift without warning.

The inquiry’s scope is wide enough to capture all of that. Findings go to the government as recommendations, which means the APPG’s conclusions could shape how the UK’s digital asset regulatory framework actually gets implemented, not just written.

Evidence collection wraps at the end of August. After that, the group reviews submissions and builds out its recommendations. No timeline has been given for when those recommendations hit the government’s desk, and it’s unclear how quickly any of this translates into concrete policy changes.

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But the banks have been formally put on notice. Josan and Vaizey want answers, and the deadline is August 31.