Nearly 40% of UK crypto users face blocked payments, stirring backlash.
When Banks Say No, Frustration Follows
It’s a heck of a headache around four in 10 UK crypto investors now say their banks have blocked or delayed payments to crypto platforms. That’s not a tiny glitch; it’s a real barrier that’s stopping people from accessing the crypto markets they’re trying to use. An IG Group survey of 500 crypto users, plus a broader group of 2,000 adults, found that 40% hit these roadblocks. Among those, nearly 30% filed a complaint, and over a third switched banks entirely to get around the restrictions.
Michael Healy, who runs IG’s UK operations, put it bluntly: “We’re in a damaging place where millions of people are effectively locked out of crypto just because of who they bank with. This kind of behavior is at best anti‑consumer, at worst anti‑competitive, and it’s not backed by the public.” It’s a powerful reflection of how anti‑consumer practices are growing more than a little tone-deaf.
Banks Blocking Crypto and Why It’s a Big Deal
It’s not just one or two banks; even familiar names like Barclays have now started blocking crypto purchases outright. Starting June 27, Barclaycard credit cards will no longer process crypto transactions, thanks to concerns about volatility and the fact that crypto isn’t covered by compensation schemes like traditional financial products are. And that’s just the latest in a long line of roadblocks that have popped up.
Meanwhile, the Financial Conduct Authority (FCA) is also stepping in, planning to ban retail investors from using credit or loans to buy crypto. Their message? Sure, crypto is growth, but it needs to be thoughtful and protective.
Ripple Effects: Behind the Friction
These financial barriers echo across the crypto ecospace. Investors trying to top up accounts or move funds are stumbling against digital locks. Without access to widely used bank accounts or simple credit cards, some folks find themselves locked out through no fault of their own, or worse, forced to jump through endless hoops just to fund trades or investments.
The FCA's new rules on retail funding hurdles add another layer, shrinking the levers regular people can pull to engage with crypto. Even beyond cards, other borrowing routes are being shut down. It’s all contributing to a sense that UK regulation is starting to lag, especially compared to more forward-leaning countries.
What’s Driving the Crackdown
Regulators and banks say they’re simply trying to protect consumers from bad outcomes. The volatile nature of crypto means someone could be saddled with debt they can’t afford, especially if they bought with credit. Plus, crypto isn’t covered by familiar protections like the Financial Ombudsman Service or the Financial Services Compensation Scheme.
But critics argue that a blanket ban or delay isn't the same as thoughtful safety. Sliding scale measures or fine-tuned transaction monitoring would go further without shutting people out entirely and would avoid investor frustration mounting.
A Risk of the UK Falling Behind
This isn't just a banking headache; it’s becoming a larger economic issue. Former Chancellor George Osborne warned recently that the UK could be getting left behind in the global crypto race. With other countries embracing more transparent frameworks, investors and innovators may start looking elsewhere.
And that has to hurt in the long run. The UK has been positioning itself as a hub for fintech and digital innovation, but these kinds of access barriers make it harder for the average person to participate. Whether it’s just moving money into an exchange or simply using credit at checkout, crypto is becoming exclusive, and that doesn’t help anyone.
What's Ahead: What to Keep an Eye On
Here’s what matters most going forward:
- How banks respond—will they tweak their policies or double down?
- Whether the FCA’s credit ban becomes law, and if so, what limitations they carve out for everyday retail users.
- How this affects investor behavior: will people switch to neobanks or offshore services?
- And whether this grows into a broader regulatory debate about innovation vs. protection in finance.
A Human Takeaway
This is more than a fintech headline—it’s about inclusion and trust. People don’t choose crypto because it’s flashy; many are trying to use it as a means to invest, to save, or to take control of their money. When their banks slam the door, that trust gets eroded pretty fast.
A smoother way forward would be better consumer education, smarter risk frameworks, and updated regulations that empower, not fence out, investors. After all, if innovation is the goal, you need to keep the door open, not lock it.
