HSBC Holdings and Nationwide Building Society don’t let regular people use credit cards to buy cryptocurrencies. They join a growing number of domestic institutions tightening digital asset restrictions.
This action responds to U.K. regulators’ warnings and controversies in the crypto industry. Reports say Nationwide will limit debit card purchases of crypto assets to 5,000 British pounds ($5,965) daily. Credit cards will no longer be accepted.
Last month, HSBC customers were prohibited from purchasing crypto with their credit cards due to the potential risk to consumers, HSBC explained. In both cases, banks pointed to warnings from the Financial Conduct Authority (FCA) about the risks of crypto assets.
There are also limits on crypto services at Santander, Natwest Group, and Lloyds Banking Group, all of which are U.K. institutions. The majority of restrictions target Binance, a cryptocurrency exchange. In August 2021, HSBC stopped credit card payments to Binance because they were worried about how the exchange was regulated in the country.
The British government is clamping down on cryptocurrency companies. In February, the FCA proposed a set of rules that could jail executives of crypto companies for two years if they don’t meet specific requirements for promotion. “Cryptoasset businesses marketing to U.K. consumers, including firms based overseas, must get ready for this regime,” the regulator said in a statement.
The financial authority also said that all providers of crypto exchanges, including owners of crypto ATMs, must be registered and follow laws against money laundering.
A long-awaited consultation paper for the United Kingdom’s soon-to-be-made crypto regulations emerged recently. The proposals aim to put the U.K.’s financial services industry at the forefront of crypto while avoiding the strict control measures that have become popular. The document discusses many things, such as algorithmic stablecoins, tokens that can’t be used elsewhere, and initial coin offerings.