Politicians have written to the chief executives at every major bank in the UK, demanding explanations regarding their restrictive policies toward cryptocurrency and digital asset firms.

The co-chairs of Parliament’s Crypto and Digital Assets All-Party Parliamentary Group (APPG) sent a letter on Tuesday, warning that limited banking access threatens to stifle the UK’s ambition to build a competitive digital finance hub.

Labour MP Gurinder Singh Josan and Lord Vaizey of Didcot, a former digital economy minister, said the APPG has heard “repeated instances where crypto and digital asset firms have struggled to open accounts with UK banks,” alongside reports that several banks have restricted crypto-related payments.

The letter listed six questions put to each bank: what its policy is, whether it currently serves crypto firms and why not if it does not, what limits it applies to crypto-related transactions, what factors drive that approach, whether the incoming regime will change it, and what the Government or regulators could do to help.

They wrote: “Access to banking services could be one of the single biggest barriers to growth for UK crypto and digital asset businesses, and could potentially undermine the success of the UK’s forthcoming crypto regime,” adding that the limited access could sway the decisions of firms deciding whether to invest in the country.

It notes that economic secretary to the Treasury, Lucy Rigby, echoed the sentiment by telling parliament that: “Under the UK’s new crypto regime, firms will need to be licensed by the FCA to provide relevant cryptoasset services, and the Government would not expect such licensed firms to be subject to restrictions by banking services providers simply because of the sector they belong to.”

Starling, HSBC, Santander, and NatWest, along with Nationwide Building Society, curbed crypto-related payments to protect retail investors from rising crypto-related fraud. Banks highlighted an increase in crypto-related scams and the risk of retail customers losing large sums to volatile prices. The Financial Times reports that HSBC, NatWest, Monzo and Nationwide cap monthly transfers to crypto exchanges at between £5,000 and £10,000, with Chase UK and Starling banning them outright.

Lord Vaizey told the paper that the difficulties amounted to “an unnecessary piece of friction” in running a business, and counted among the obstacles facing anyone setting one up in the UK.

The Financial Services Compensation Scheme does not cover crypto-related losses. The APPG inquiry was launched on July 21 and is currently taking written evidence until August 31. The co-chairs claimed the letter was not intended to pre-empt the findings of the inquiry.

It comes after the Financial Conduct Authority finalised its rules for the sector in June, with the new changes coming into effect from October 2027. The rules are intended for firms that help people buy, trade and hold crypto in the UK. Trading platforms, custodians, stablecoins issuers designed to hold a steady value, intermediaries and staking providers will all need authorisation from the regulator to operate in the UK.

Firms will be required to meet financial-resilience requirements, including capital and stress testing, as well as new market-integrity rules targeting insider trading and market manipulation.