9 of 10 UK Retail Banks Restrict Crypto Payments

Nine of the 10 largest UK retail banks currently block or limit payments involving cryptocurrency, highlighting the continuing restrictions faced by customers despite the country’s plans for a comprehensive crypto regulatory framework.

According to information shared by Wu Blockchain, UK banks will not be legally required to remove blanket restrictions on payments to cryptocurrency exchanges when the Financial Conduct Authority’s (FCA) new crypto regime takes effect on Oct. 25, 2027.

The FCA has indicated that it hopes stronger regulatory safeguards will encourage banks to reconsider broad restrictions voluntarily. However, the regulator will leave decisions over whether to process crypto-related transactions to individual banks.

Banks Retain Discretion Over Crypto Transactions

The current situation means banks can continue determining their own approach to cryptocurrency payments based on their risk appetite. Nine of the 10 largest UK retail banks currently block or cap crypto-related payments, according to the information reported by Wu Blockchain and The Banker.

The issue has emerged as the UK government pursues its stated ambition of establishing the country as a global digital asset hub. The restrictions have remained a point of pressure between the banking sector, crypto industry and policymakers.

The FCA has expressed hope that a clearer regulatory framework will provide banks with greater confidence when dealing with regulated crypto businesses. That does not, however, translate into a requirement for banks to process cryptocurrency transactions.

FCA Crypto Rules Take Effect in 2027

The FCA confirmed that its new cryptoasset regulatory regime is scheduled to come into force on Oct. 25, 2027. The framework will introduce new regulated activities covering areas including cryptoasset trading platforms, safeguarding, dealing and arranging deals.

Applications for authorization under the new framework are scheduled to open on Sept. 30, 2026, with the application window for firms seeking to use transitional arrangements running until Feb. 28, 2027.

The FCA published its final rules and guidance in June 2026 and has continued issuing guidance to help firms prepare for the new regime. The regulator said the framework will establish standards for firms conducting regulated cryptoasset activities in the UK.

Regulatory Clarity Does Not Guarantee Banking Access

The distinction between regulating crypto businesses and requiring banks to provide banking or payment services remains central to the issue.

Under the forthcoming framework, eligible crypto businesses will need to obtain FCA authorization for activities within the regulatory perimeter. The regulator's rules, however, do not require individual banks to accept crypto-related payments from their customers.

That leaves payment access dependent on markets decisions made by individual lenders. The FCA’s expectation is that improved regulatory safeguards may encourage banks to reassess blanket restrictions, but banks retain discretion over whether to change their policies.

For UK crypto users and businesses, the next major regulatory milestone will be the opening of the FCA’s authorization gateway on Sept. 30, 2026, ahead of the new regime taking effect on Oct. 25, 2027.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.