UK banks ramp up crypto restrictions with new retail limits

LONDON – The Nationwide Building Society and HSBC Holdings toughened limits on retail customers’ access to cryptocurrency assets last week, becoming the latest British banks to impose curbs after industry scandals and regulatory warnings.

Nationwide is applying daily limits of £5,000 (S$8,000) on debit card purchases of crypto assets, the building society informed customers on Wednesday, while its credit cards can no longer be used to buy crypto. HSBC said it barred customers from making crypto purchases via its credit cards last month.

“This is because of the possible risk to customers,” HSBC said in a statement.

Both banks pointed to warnings issued by the Financial Conduct Authority, which has labelled crypto as high risk for several years.

The lenders join Banco Santander, Lloyds Banking Group and NatWest Group, which are among the institutions that have placed crypto-specific limits on British customers in recent years.

Most of the major banks have also implemented exchange-specific restrictions, with the world’s largest crypto platform Binance Holdings the most popular target.

The

collapse of crypto exchange FTX in November

has prompted fresh warnings about the dangers of crypto.

Global bodies, including the International Monetary Fund and the Financial Action Task Force, have repeatedly cautioned banks against inviting the risks that crypto assets can pose to the traditional financial system.

Several United States banks with close ties to the sector are facing growing scrutiny.

Silvergate Capital, a crypto-friendly bank, sank to a record low on Thursday after saying it was reviewing whether it can remain viable.

Regulators, including the US Federal Reserve, have told financial institutions to be wary of “potential heightened liquidity risks” presented by certain sources of funding from crypto-related entities. BLOOMBERG