Cryptocurrencies are quickly becoming a thing all over the world with countries having different rules and regulations for trading and use. When crypto began in the UK, a lot of UK investors had their accounts terminated with their funds frozen, simply because they used it to transfer or withdraw funds to and from a cryptocurrency exchange.
Today, the relationship between banks and the emerging cryptocurrency industry has taken huge strides in the right direction in the past few years. However, this does not mean that everything is rosy, since not all banks can be used by cryptocurrency investors and traders. Some of these banks have banned the purchase of cryptocurrency via debit and credit cards.
In this article, we will provide an updated list of the best crypto-friendly banks in the UK. Before we go any further, let’s review the legal status of cryptocurrencies in the UK and what you might do with your digital assets while in the country.
The legality of encryption in the UK
Cryptocurrency is not illegal in the UK, but is regulated by the country’s Financial Conduct Authority (FCA) only for money laundering purposes. With the exception of some crypto-asset providers who can obtain electronic licenses instead of registering with the Financial Conduct Authority (FCA), all UK cryptocurrency exchanges must be registered with the FCA.
Crypto is very much embraced in the UK with around 1.5 million people owning some cryptocurrency in 2018, which has grown to an estimated 9.8 million by February from 2021.
The UK FCA is reasonably quiet on Bitcoin, even though the asset is not considered legal tender. As of 2020, the asset is considered property in the UK, which means it is subject to capital gains tax. However, as cryptocurrencies are different from the traditional asset class, taxes can vary based on the entity involved.
However, in 2021, FCA banned Binance from participating in regulated activity in the UK due to the outcome of an operational review. The country has also taken giant strides to ban crypto-derivatives, as customers cannot reliably value them.
Since January, the FCA has required all companies that provide cryptocurrency-related services to register and prove compliance with anti-money laundering rules.
What can you do with cryptocurrency in the UK?
In the UK, no major store accepts cryptocurrency as a form of payment. However, there are some businesses – such as Torguars – that will allow you to use cryptocurrency as a means of payment for services or products.
Bitnewt, a leading Bitcoin marketing agency that provides services such as content marketing and social media, also accepts crypto. Jewelery stores like Diadem also accept bitcoin.
Today, cryptocurrencies are generally held for investment purposes. Most people in the UK buy and sell cryptocurrency most of the time.
Top Five UK Friendly Cryptocurrency Bank Accounts
Before you hold any crypto assets in the UK, you may want to know which banks allow you to take full advantage of your crypto. Crypto-friendly banks, in this context, are banks and financial institutions that allow customers/customers to easily purchase cryptocurrencies using their debit and credit cards.
Since the Financial Conduct Authority (FCA) issued a file Official warning About Binance Markets Ltd in June, banning it from operating in the UK, some banks have either banned or restricted crypto activities with Binance and Kraken. Here are the top five crypto-friendly banks currently in the UK.
sAwal Bank of Scotland (RBS): The UK government owns the Royal Bank of Scotland. In the past few years, RBS has had a positive approach towards cryptocurrency trading. The bank also offers you the opportunity to buy and sell cryptocurrencies. However, the Royal Bank of Scotland will restrict payments to cryptocurrency exchanges that present the highest risk of financial harm.
Solaris Bank: Solaris is a highly regulated bank that not only offers you cryptocurrency transactions but also offers you a custodian service for cryptocurrencies. In early 2021, the bank launched a crypto custody service regulated according to the brokerage and trading API.
Cooperative Bank: Generally, the cooperative bank allows debit and credit card purchases, as well as transactions to and from crypto services.
Nationwide Bank: Nationwide offers debit and credit cards for making payments in cryptocurrency. There is no ban on the bank, but it said its systems are designed to capture any transactions that appear suspicious or unusual to members, including payments to trading platforms such as cryptocurrency exchanges.
Barclays: With over £1.3 trillion in assets, Barclays Bank is one of the oldest and largest banks in the UK. It allows you to buy cryptocurrency with its debit and credit cards in most cases. However, you should know that Barclays has banned both Debit and credit card payments to Binance since July to only allow customers to withdraw funds from Binance.
In conclusion, the number of people who own cryptocurrency is steadily increasing globally and in the UK. The number of companies accepting bitcoin payments is also increasing.
Although cryptocurrency transactions have high risks and various types of restrictions, some banks in the UK allow users to conduct crypto transactions with ease.