This article was last updated on June 10, 2022
Cryptocurrencies are the hot new investment opportunity that everyone is trying to get in on. As their prices skyrocketed in 2021, they fully entered the mainstream media and attracted global attention. Everyone, from the most inexperienced retail investor to seasoned and conservative Wall Street capitalists, has recognized the new technology’s potential and value. However, if you are looking to join them, what you might not know is that not every bank will let you do so easily. Many institutions have declared that they will not support transactions on crypto exchanges. Others simply block transfers without providing any explanation. As a result, we have put together this list of crypto-friendly UK banks to help you in your investing career.
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What Are Crypto-Friendly UK Banks?
Many conventional banking institutions all over the world have declared themselves in opposition to cryptocurrencies. This can be attributed to many factors, both operational and political. As the sole place where people can easily store and manage their funds, traditional banks are not too keen on the prospect of a decentralized alternative. Cryptocurrencies have already significantly disrupted the sector and promise to do so even further. As innovative as they may be, cryptos threaten the banking sector’s established industry.
On the other hand, banks that have chosen to work with crypto exchanges and platforms have been experiencing significant troubles. Due to the unpredictable and highly volatile nature of cryptocurrencies, large sums of money can suddenly be deposited or withdrawn. Such transactions are hard to keep track of.
This can easily give way to fraud and cases of money laundering, which banks have to deal with. Additionally, many customers tend to issue chargebacks on deposits that they have lost on the crypto market. This is another extra hassle that banks don’t want to deal with and costs them money.
With so many hurdles to jump over, retail investors are often left at a loss as to how they can trade cryptos. But not all banks are so averse to cryptocurrencies. And even if yours doesn’t play well with crypto exchanges, there are ways to get around this.
Top UK Crypto-Friendly Banks
1. Royal Bank of Scotland (RBS)
The Royal Bank of Scotland is one of the best traditional banks when it comes to investing in cryptocurrencies. As a government-owned institution, the RBS has generally had a favorable outlook on cryptocurrencies. For those interested, even the bank itself offers investment opportunities in crypto assets.
Customers report that they usually don’t have any issues with transactions to and from any of the major exchanges. You should be able to easily deposit funds to your preferred crypto platform with your RBS credit or debit card.
However, this applies only to well-established and high-profile crypto exchanges. If you prefer to trade on a more obscure one, your mileage may vary. The bank has even stated that it will not process transactions from platforms that it deems to present a high risk of financial harm.
2. Nationwide Bank
Nationwide has had a more or less neutral stance on cryptocurrencies. While it has not announced any strong opposition, the institution is more of a crypto-friendly bank. However, there are some limitations here. For instance, deposits to crypto exchanges are only allowed with the bank’s debit cards. Meanwhile, credit card transactions to such platforms are not allowed. This is a standard policy for the UK, which is also applied to online gambling and other high-risk ventures.
Reports from customers indicate that few issues usually arise when using Nationwide for crypto. However, the bank itself does have systems in place that will hold transactions that it deems suspicious. This can sometimes affect payments to and from crypto platforms.
An exception here is Coinbase, which announced in 2018 that it would not be accepting SEPA deposits from the bank. This has not changed in the years since, and you still cannot use a Nationwide account to deposit funds to Coinbase.
3. NatWest
NatWest is a bank owned by the Royal Bank of Scotland. As a result, it is more of a crypto-friendly bank. However, it is definitely more restrictive than its parent organization. Over recent years, NatWest has instituted new policies that limit client activity when it comes to crypto assets.
For one, NatWest limits the amount that customers can deposit on crypto exchanges in a single day. This includes major platforms like Binance and Crypto.com, which are well-established and regulated exchanges. Furthermore, the bank stated that it would block any transactions to platforms that it sees as potentially dangerous. This includes ones that have been reported of fraud.
Apart from that, customers generally report little issues when using the bank’s services to deposit and withdraw from crypto exchanges. You shouldn’t have any problems, provided you don’t make too many transactions in a single day and stick to the more prominent exchanges.
4. Barclays
Barclays was one of the first old-school UK banks to embrace crypto. In fact, it used to be the official banking partner of Coinbase prior to 2019. However, since their partnership ended, Barclays has tightened its policies a bit. While customers can still use their Barclays cards to deposit and withdraw from crypto exchanges, problems can sometimes arise.
There have been reports of cases where the bank has put a hold on transactions. This will usually be done at its own discretion and with little explanation. Additionally, there have been instances of the bank freezing whole accounts following crypto-related transactions. Such was the case when Barclays and HSBC froze 50cycles’ accounts. However, such instances have been isolated incidents with additional factors.
5. The Co-operative Bank
The Co-op Bank is definitely one of the more crypto-friendly UK banks. Although Co-op does not have an official stance on crypto-related assets, it has certainly not done anything to oppose them. According to customer reports, both credit and debit cards can be used to deposit funds on crypto exchanges. Additionally, very few have run into any problems while trying to do so. While the bank might put a hold on some transactions from time to time, this is only a preventative measure.
Related: The Ultimate Guide To The Crypto Tax In The UK 2022
Non-Crypto-Friendly Banks In The UK
While some banks won’t stand in your way when dealing with crypto platforms, others will make it a point to do so. Here are some of the strongest opponents when it comes to cryptocurrencies.
1. Lloyds Bank
As one of the oldest banks in the UK, Lloyds is naturally also one of the staunchest opponents to cryptocurrencies. The bank has gone to great lengths to prevent its customers from participating in the crypto market.
While only Lloyds credit cards are officially barred from use on crypto platforms, their other payment services have been known to cause issues. In the majority of cases, clients report their transactions not going through successfully. Furthermore, there have been reports of the bank freezing accounts following such instances. It would then follow up with a call, asking customers about their activity and intentions.
Lloyds is also the parent organization of several other banks like The Bank of Scotland and Halifax. As a result, these share the same policies and outlook on crypto.
2. HSBC Bank
HSBC is another institution that has declared itself strongly against cryptocurrencies. However, this one has gone so far as to block all transactions to and from crypto platforms. Regardless of whether you are using a credit card, a debit card, or a wire transfer, you will not be able to deposit or withdraw from crypto exchanges.
While most banks will limit the ways you can transfer to and from crypto exchanges, HSBC blocks all crypto-related transactions. As such, if you are a client of the bank, you should avoid trying to use your account for any such activities. Doing so will likely result in blocked transactions and can even cause problems with your account.
3. Capital One
While mainly a credit provider, Capital One does offer many other banking services to its customers. However, the institution made a public announcement to Breitbart back in 2018 that it would be blocking all transactions to cryptocurrency exchanges and platforms. To this day, Capital One clients are able to use neither their credit nor debit cards to deposit or withdraw from such websites.
4. Starling Bank
Starling Bank is one of the newer so-called “challenger” banks in the UK. Founded in 2014, it quickly gained widespread popularity due to its forward-thinking approach and convenience. Many customers are drawn to the service’s easy-to-use platform, low fees, and the elimination of bureaucratic banking structures.
As such a tech-focused service, Starling Bank looks exactly like the type of service to embrace cryptocurrencies and become a crypto-friendly UK bank. And that was the case at first. However, as time passed and the crypto market became more erratic, the company changed its attitude towards the controversial new technology.
While Starling’s current official stance on the matter is that it has no policy preventing crypto-related transactions, customer reports show otherwise. While some report having no issues with the service, many others report having their transactions blocked and even their accounts frozen. Although it cannot be said which one is more prevalent, this does make Starling a mixed bag at best. As such, it would probably be better to avoid the service as it can cause a lot of issues and headaches.
Suggested article: The Best Penny Cryptocurrencies To Invest In 2022
Crypto-Friendly Alternatives To UK Banks
In order to get around the many restrictions and limits that UK banks apply, customers have turned to various alternatives. Most prevalent amongst these have been fintech companies, which offer many of the same services much more conveniently and at a lower price. Here are some of the best ones that you can use:
1. Revolut
Revolut is arguably the most popular among the fintech services available in the UK. It offers a wide range of services, from disposable cards and premium subscription plans to integrated investing functions. The company even started offering deposit insurance through its new bank account option.
However, Revolut is also very crypto-friendly. You can easily deposit and withdraw funds from crypto-associated platforms without any issues. As a result, many UK citizens have started transferring their funds to Revolut before depositing them with a crypto exchange.
Additionally, Revolut also offers the option to invest in various cryptos within the app itself. However, this does work on a contract for difference (CFD) basis. As such, it is more suited for casual or beginner investors.
2. Nuri
Nuri is another fintech service that offers many of the same features as Revolut. Just like the aforementioned platform, Nuri allows you to freely move your cash around with little to no fees. In fact, the only extra charge on the platform is the 1% fee when trading. In recent years the company partnered with Solarisbank to provide a €100,000 deposit guarantee for its customers.
Nuri is also very crypto-friendly. While the company is known for its multiple savings plans, these are all fully integrated with cryptocurrencies. The service even allows you to automate your purchases of Bitcoin and Ethereum, making it a less involved activity. While this might not be suited for seasoned traders, it is a nice way for less experienced investors to learn.
3. Wirex
As Wirex clearly states on its website, the company is not a bank. As such, it does not provide some of the same services that you can expect from a normal bank. However, this also allows the service to be much more flexible and provide benefits that its competitors cannot.
The selling point here is the “Cryptoback” cashback reward system that will return 2% of your expenditure in the form of Wirex Tokens (WXT). This is the company’s own proprietary crypto token that it uses to operate the reward system.
Customers of Wirex have been able to freely deposit and withdraw funds from crypto exchanges with little to no issues. However, like any other financial service, Wirex might block transactions if they seem suspicious or are related to platforms of questionable character.
4. Xace
Xace is an EU-based online banking service that is now fully licensed by the FCA to operate in the UK. Initially intended as a gaming-friendly service, Xace’s main target base is customers looking to deposit or withdraw from casino and online gambling websites. However, over the years, this lenient policy has also expanded to crypto exchanges and various other platforms.
According to customer reports, Xace will very rarely hinder crypto-related transactions. As such, it has quickly turned into a preferred choice among crypto enthusiasts in addition to online gamblers.
5. Digital Wallets (Skrill, PayPal)
Digital wallets are another popular service that many customers have turned to for use with crypto platforms. These allow you to easily store your funds and make payments online. Most of them have fully embraced crypto payments and allow customers to do as they please with their own funds. While this might seem like an obvious solution, many old-school banking institutions do not allow such freedom to their customers.
The major issue with digital wallets is that the crypto platform you have chosen needs to support your particular one. If you want to use Skrill, for example, the website you are making a payment to needs to have integrated the service into their payment options. As such, the usability of digital wallets will vary wildly, and you might not be able to use your preferred one on the crypto exchange you want to trade on.
Continue reading: 3 Most Undervalued Crypto in 2022 That Will Explode
The Bottom Line On Crypto-Friendly UK Banks
Today’s technologically advanced world and widespread access to internet services have allowed many alternatives to conventional banking institutions to appear. These have challenged the status quo in the banking sector and disrupted it by providing a cheaper and more convenient alternative for customers.
Such services are also much more progressive than their forefathers, allowing them to more quickly and agilely adapt to changes in the market. As such, they are free of bureaucratic restrictions and are able to provide new services much quicker.
While there are many routes that you can go down, it is always important to thoroughly vet the service you choose and make sure that it is trustworthy. Additionally, not all fintech companies are so crypto-friendly, so make sure to check whether the one you have set your sights on suits your needs.
