Chase UK recently announced that it will no longer allow its customers to purchase cryptocurrencies using debit cards or through bank transfers. The bank stated concerns over the risk of fraud related to digital currencies as the reason for the decision. Coinbase CEO, Brian Armstrong, criticized the move, stating that private companies should not have the power to “de-platform” the crypto industry. He suggested that the UK government should take note of Chase UK’s ban and consider the country’s ambition to become a Web3 and crypto hub.
Armstrong argued that it is not acceptable for banks to unilaterally decide to block transactions related to cryptocurrencies. He believes that such decisions should be made by the government. Other UK banks, such as NatWest and HSBC, have also taken steps to limit or ban crypto transactions due to concerns about fraud. Data from Action Fraud, the UK fraud reporting agency, shows a rise of over 40% in consumer losses to crypto fraud in the past year, surpassing £300 million for the first time.
Despite the association of cryptocurrencies with illicit activities, advocates argue that the industry has matured and can be a legitimate part of everyday payments and trading. The UK government has been working on legislation to regulate retail trading in crypto assets, with the aim of bringing crypto assets into the regulatory fold. However, some critics argue that the existing legislation, such as the Financial Services and Markets Bill, is not comprehensive enough to address crypto through tailored laws. The UK’s ambition to become a crypto hub may face challenges if more banks continue to limit or ban crypto-related transactions.