UK Parliament Investigates ‘Banking Chokepoint’ That Blocks Crypto Businesses
The UK Parliament has launched an official inquiry into discriminatory banking practices against companies in the cryptocurrency sector. The cross-party parliamentary group (APPG) “Crypto and Digital Assets” is examining the phenomenon of the banking chokepoint, which is hampering the development of the crypto industry in the United Kingdom — one of the world’s largest financial centers.
A ‘Banking Chokepoint’ That Stifles Innovation
For several years, dozens of British crypto firms have reported persistent difficulties in opening and maintaining bank accounts. Banks refusing to open accounts, drastic restrictions on transactions, unilateral closures without notice — the issue is known as the “banking chokepoint”, drawing a parallel with the “Chokepoint 2.0” operation in the United States.
The APPG, chaired by MP Dr. Lisa Cameron, announced the launch of this formal inquiry on July 21, 2026. The goal: to understand why British financial institutions systematically shut the door on crypto players, and to determine whether these practices constitute a violation of competition rules and a brake on innovation.
Scope of the Parliamentary Inquiry
The APPG inquiry will focus on several key areas:
- Denial of accounts: the proportion of crypto firms that are refused a bank account compared to other sectors
- Transaction restrictions: arbitrary caps, blocked deposits and withdrawals to and from exchange platforms
- Unilateral closures: terminations without valid reason or reasonable notice
- Economic impact: an estimate of the lost value for the British economy
- International comparison: how the UK positions itself against the EU (MiCA), the UAE, or Singapore
Testimonies will be gathered from crypto businesses, banks, regulators (FCA, PRA) and the UK Treasury. The final report is expected before the end of the parliamentary year.
A Structural Problem, Not an Isolated Incident
The banking chokepoint is not a new issue in the UK. As early as 2023, a Treasury inquiry found that 41% of surveyed crypto firms had had their bank accounts closed or restricted without a satisfactory explanation. In 2024, the FCA published guidelines reminding banks not to discriminate against legitimate crypto clients — but with no tangible effect.
The situation even worsened after the collapse of some platforms in 2022–2023. Banks, becoming extremely cautious in the face of reputational risk and regulatory requirements, adopted a “zero-risk” approach that de facto excludes any crypto player, including perfectly compliant and regulated firms.
Among the banks most often cited for their restrictive practices are Barclays, NatWest, HSBC and Lloyds. Some have completely stopped accepting deposits from crypto exchanges, while others impose caps so low that they make any professional activity impossible.
Economic Consequences and Talent Flight
The consequences of this banking chokepoint are multiple:
- Company exodus: several British crypto startups have relocated their operations to Switzerland, Singapore or Dubai, where banking access is smoother
- Loss of competitiveness: while the EU harmonizes its regulatory framework with MiCA, the UK struggles to retain talent and capital
- Stifled innovation: without a bank account, it is impossible to pay employees, suppliers or taxes — the very foundation of any economic activity
- Black market: firms denied banking turn to less regulated alternative solutions, which harms the transparency of the sector
According to estimates from the UK Crypto Asset Business Council, the banking chokepoint has already deprived the British economy of over £1.5 billion in potential added value over the last three years.
International Context: The ‘Chokepoint 2.0’ Phenomenon
The UK is not alone in facing this problem. In the United States, the “Chokepoint 2.0” operation — informal pressure from federal regulators on banks to limit their relationships with the crypto sector — has been the subject of numerous Congressional hearings.
In Europe, the MiCA regulation (Markets in Crypto-Assets) has provided a clear framework that reassures banks, but access to banking services remains difficult in several member states. France, with the PSAN registration issued by the AMF, has achieved encouraging results: several French banks have started opening accounts for registered crypto firms.
The APPG inquiry is actually inspired by the French model and the framework in Singapore, where the Monetary Authority of Singapore (MAS) explicitly asked banks not to discriminate against legitimate crypto companies.
What Solutions Are Possible?
Several avenues are emerging to resolve the British banking chokepoint:
- Clear regulatory framework: a specific law obliging banks to provide reasons for any refusal of service and to respect notice periods
- Crypto banking ombudsman: a specialized body to handle disputes between crypto firms and banks
- Crypto banking license: allowing crypto firms to obtain a restricted banking license, as some fintechs already do
- Political pressure: the UK Treasury could issue a formal directive to banks, as the MAS did in Singapore
- Technological innovation: stablecoins and decentralized finance (DeFi) offer alternatives to traditional banking services
Timeline and Next Steps
The APPG has opened a call for evidence until September 30, 2026. Public hearings will begin in October, with representatives from major British banks, regulators and crypto firms. The final report is expected in December 2026.
This inquiry could lead to legislative recommendations that the British government would be invited to incorporate into a future bill on digital assets — a text that the Treasury has been discreetly preparing since the start of the year.
For British crypto players, this is a ray of hope. After years of frustration with a banking system that treats them as pariahs, political voices finally seem to be rising. The question remains whether the APPG’s recommendations will be followed up — or whether the banking chokepoint will continue to hold back the UK’s crypto ambitions.
Conclusion
The UK Parliament’s inquiry into the crypto banking chokepoint marks a turning point in the relationship between the digital asset industry and the traditional financial system in the country. As London aims to remain a global financial capital, the issue of banking access for crypto firms is not just a technical detail — it is a decisive test of the credibility of its crypto strategy. The coming months will be crucial.
⚠️ Opinion and analysis — not investment advice
This article is provided for information and analysis purposes only. It does not constitute investment advice, a solicitation, or a recommendation to buy/sell digital assets. Cryptocurrencies carry high risks — only invest what you can afford to lose. Always do your own research (DYOR) before any financial decision.
This article is not sponsored.
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