Following the series of scandals and renewed scrutiny of the crypto industry, several global financial institutions have taken drastic steps to protect their customers. Nationwide Building Society, one of the UK's largest cooperative financial institutions, is the latest banking entity to restrict customers' access to cryptocurrencies.
According to a Reuters report, which cited an email the British lender sent to its members, Nationwide said that it is applying daily limits of £5,000 on debit-card crypto purchases made by its Adult Current account holders. Additionally, the bank will no longer allow retail investors to make crypto purchases using its credit cards.
Nationwide revealed that this latest move was in response to growing regulatory concerns over the numerous risks involved in buying digital currencies. The bank referenced the repeated warnings issued by the UK's Financial Conduct Authority (FCA), which labels crypto as a high-risk investment.
The cataclysmic collapse of the FTX exchange further undermined trust in the industry, sparking fresh warnings from global regulatory bodies about the dangers of crypto investments. A recent report revealed that UK investors lost over £2 million following the FTX crash. Still, several market analysts are convinced that the reported losses are just the "tip of the iceberg."
UK Banks Move to Ban Crypto Purchases
The latest announcement from Nationwide announcement comes amid similar moves by other UK banks. In November 2022, UK's Santander placed limits on all crypto transactions for its customers in the country.
The bank also blocked UK customers from sending real-time payments to cryptocurrency exchanges. Santander noted that the limits of £1,000 per transaction and £3,000 per month were part of its efforts to shield customers from crypto-related risks.
Interestingly, the leading crypto exchange, Binance, is bearing the brunt of these restrictions as several banks have banned any payment to the exchange. On its official website, Nationwide stated that it will continue to restrict payments made to Binance, citing "similar action from other providers, media coverage and regulatory uncertainty".
In a similar move, HSBC, Barclays, and Natwest have all blocked card payments to Binance following regulator uncertainty towards the exchange.
As tensions between regulators and crypto businesses continue to heat up, the UK government is racing to introduce clear regulations to the nascent industry. In December, the UK’s Payment System Regulator (PSR) revealed that it is exploring regulating crypto to protect UK investors.
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