As cryptocurrency adoption continues to grow, more and more people are looking for ways to easily buy, sell, and hold digital assets. One of the most significant barriers to mainstream adoption has been the difficulty in finding crypto-friendly banks. However, in recent years, a few UK banks have embraced cryptocurrency, making it easier for their customers to engage with the digital asset world. This article will explore the most crypto-friendly banks in the UK in 2023 and what makes them stand out.
Is crypto legal in the UK?
Yes, cryptocurrency is legal in the UK. The UK government considers cryptocurrencies to be a form of property and subject to capital gains tax. The Financial Conduct Authority (FCA), the UK’s financial regulatory body, also oversees cryptocurrency activities and has issued guidance for businesses operating in the crypto space. However, it is important to note that cryptocurrency regulations are still evolving and subject to change. Therefore, individuals and businesses must stay updated on the latest developments in cryptocurrency regulations in the UK.
What makes a bank crypto-friendly?
A bank can be considered crypto-friendly if it offers products and services that cater to customers who engage with cryptocurrencies. Here are some of the key characteristics that make a bank crypto-friendly:
- Support for cryptocurrency transactions: A crypto-friendly bank should allow customers to buy, sell, and hold cryptocurrencies through its platform. This may involve integrating with cryptocurrency exchanges or providing direct access to cryptocurrency markets.
- Low or no transaction fees: Cryptocurrency transactions often come with high fees. Still, a crypto-friendly bank should aim to keep these fees as low as possible to encourage customers to engage with cryptocurrencies.
- Competitive exchange rates: A crypto-friendly bank should offer competitive exchange rates for buying and selling cryptocurrencies. This means customers can get the best possible deal when they engage with digital assets.
- Security: Cryptocurrencies are a high-risk asset, so a crypto-friendly bank should take appropriate blockchain security measures to protect customers’ funds and data. This may involve two-factor authentication, biometric login, and end-to-end encryption.
- Regulatory compliance: A crypto-friendly bank should comply with all relevant cryptocurrency regulations and laws. This helps to ensure that customers can engage with digital assets safely and legally.
- Innovation: A crypto-friendly bank should be willing to embrace new technologies and explore innovative ways to offer cryptocurrency-related products and services to customers. This may involve partnering with fintech companies or investing in new technologies.
- Education and support: Cryptocurrencies can be complex and confusing, so a crypto-friendly bank should provide customers with the necessary education and support to help them navigate this new asset class. This may involve offering educational resources or dedicated customer support teams.
Which UK banks are the most crypto-friendly?
Barclays Bank is one of the most crypto-friendly banks in the UK, having been among the first to publicly acknowledge and embrace cryptocurrency. In 2018, Barclays became the first major UK bank to partner with a cryptocurrency exchange, Coinbase, allowing customers to purchase digital assets using their Barclays debit card. This partnership made it much easier for UK customers to access the cryptocurrency market and was seen as a significant step forward in the mainstream adoption of digital assets.
Barclays has also been active in the blockchain space, having filed several patents related to blockchain technology. The bank has also been involved in a project called Utility Settlement Coin, which aims to create a digital currency for financial markets that can settle in real-time.
Revolut is a UK-based digital bank that has made a name for itself by offering innovative financial products and services, including support for cryptocurrency.
Revolut allows customers to buy, sell, and hold several different cryptocurrencies, including Bitcoin, Ethereum, Litecoin, and Bitcoin Cash. Customers can access the cryptocurrency market through the Revolut app, which allows them to view their cryptocurrency holdings and track their performance in real-time.
One of the key advantages of using Revolut for cryptocurrency transactions is that the bank does not charge any fees for buying or selling digital assets. Customers can also exchange cryptocurrencies at the interbank exchange rate, which means they can get the best possible rate when buying or selling digital assets.
In addition to its cryptocurrency offerings, Revolut has also taken steps to be more blockchain-friendly. The bank has developed a range of partnerships with blockchain and cryptocurrency companies, including Bitstamp and Paxos. These partnerships allow Revolut to offer customers faster and more efficient cryptocurrency transactions.
Revolut has also developed a range of security measures to protect its customers’ funds and data. The bank offers two-factor authentication and biometric login, which helps to prevent unauthorized access to customer accounts. Revolut uses end-to-end encryption to protect customer data and has implemented strict anti-fraud measures to prevent fraudulent activity.
3- Lloyds Bank
Lloyds Bank is one of the largest and oldest banks in the UK. While the bank has not been as quick to embrace cryptocurrency as some of its competitors, it has become more blockchain-friendly in recent years.
Lloyds Bank has not yet announced plans to offer customers the ability to buy, sell, or hold cryptocurrencies. However, the bank has shown an interest in blockchain technology and has taken steps to explore its potential applications in the financial industry.
In 2018, Lloyds Bank announced that it had successfully completed a pilot project using blockchain technology to streamline the process of managing syndicated loans. The bank worked with other financial institutions to create a shared database using blockchain technology, allowing more efficient and secure data sharing between participants in the syndicated loan market.
Lloyds Bank has also been involved in several blockchain-related initiatives and projects. In 2019, the bank became a founding member of the Global Digital Finance (GDF) industry association focused on developing global standards for blockchain and digital finance.
Additionally, Lloyds Bank has invested in several blockchain startups and has explored the technology’s potential applications in areas such as trade finance and supply chain management.
Monzo Bank is a digital bank based in the UK that has gained a reputation for its innovative and customer-centric approach to banking. The bank has taken a crypto-friendly stance and offers support for cryptocurrency transactions through its app.
Customers of Monzo Bank can buy, sell, and hold cryptocurrencies through the bank’s app, which is available on both iOS and Android devices. The bank supports several cryptocurrencies, including Bitcoin, Ethereum, and Litecoin, and customers can view their cryptocurrency holdings and track their performance in real-time.
One of the key advantages of using Monzo Bank for cryptocurrency transactions is that the bank does not charge any fees for buying or selling digital assets. Customers can also exchange cryptocurrencies at the interbank exchange rate, which means they can get the best possible rate when buying or selling digital assets.
Monzo Bank has also taken steps to make its app more blockchain-friendly. In 2020, the bank partnered with cryptocurrency exchange Coinbase to allow customers to buy and sell cryptocurrencies directly from the Monzo app. The bank has also partnered with other blockchain and cryptocurrency companies, such as TransferWise and IFTTT, to offer customers innovative financial products and services.
In addition to its cryptocurrency offerings, Monzo Bank has developed a range of security measures to protect its customers’ funds and data. The bank offers two-factor authentication and biometric login, which helps to prevent unauthorized access to customer accounts. Monzo Bank also uses end-to-end encryption to protect customer data and has implemented strict anti-fraud measures to prevent fraudulent activity.
5-Nationwide Building Society
Nationwide Building Society is a UK-based mutual financial institution that operates as a building society, meaning its members rather than shareholders own it. While the building society has not yet announced plans to offer cryptocurrency-related products and services, it has taken an interest in blockchain technology. It has explored its potential applications in the financial industry.
In 2018, the Nationwide Building Society announced that it had completed a pilot project using blockchain technology to manage to create and execute a bond issue. The pilot was carried out in collaboration with several other financial institutions. It demonstrated the potential benefits of blockchain technology in the bond market, including increased transparency, reduced settlement times, and lower costs.
In addition to its work with blockchain technology, Nationwide Building Society has also invested in several fintech companies, some of which focus on blockchain and cryptocurrency. For example, the building society has invested in the blockchain-based mortgage platform Proptech, which aims to streamline buying and selling properties using blockchain technology.
Nationwide Building Society has also been involved in several industry initiatives focused on exploring the potential applications of blockchain technology in the financial industry. In 2019, the building society became a member of the Cryptoassets Taskforce, which the UK government set up to explore the risks and opportunities of crypto assets and distributed ledger technology.
While the Nationwide Building Society may not yet offer customers the ability to buy, sell, or hold cryptocurrencies, the building society has shown an interest in blockchain technology. It has taken steps to explore its potential applications. As blockchain technology continues to evolve and gain wider acceptance, the Nationwide Building Society may become more crypto-friendly.
While some banks have started offering cryptocurrency-related products and services, most traditional banks do not accept cryptocurrencies as payment or deposit. Banks generally hesitate to accept cryptocurrencies due to the regulatory uncertainty surrounding digital assets and the potential risks involved.
Cryptocurrencies have the potential to disrupt the traditional banking industry in several ways. Here are some of the ways that cryptocurrencies may affect banks:
Disintermediation: Cryptocurrencies allow for peer-to-peer transactions without intermediaries such as banks. This means that individuals and businesses can transact directly with each other, bypassing traditional banks. This could reduce the need for banks to act as middlemen in financial transactions.
Competition: Cryptocurrencies may create new competitors for banks. For example, cryptocurrency exchanges and wallet providers are emerging as viable alternatives to traditional banks for holding and managing funds.
Payment processing: Cryptocurrencies can facilitate faster and cheaper cross-border payments. As a result, banks may face increased competition in the payment processing space, particularly in areas such as remittances and international transactions.
Innovation: Cryptocurrencies and blockchain technology are still in the early stages of development, but they have already sparked significant innovation in the financial industry. Banks may need to keep up with these innovations to remain competitive and relevant.
Security: Cryptocurrencies and blockchain technology offer enhanced security features that traditional banking systems may struggle to match. Banks may need to invest in new security measures to protect their customers’ funds and data.
Regulation: The regulatory landscape around cryptocurrencies is still evolving, and banks may need to adapt to new regulations and compliance requirements.
While there are still many banks that are hesitant to embrace cryptocurrency, there are a few UK banks that have taken a more progressive approach. These banks have recognized digital assets’ potential value and made it easier for their customers to engage with the cryptocurrency market. While the level of crypto-friendliness may vary between banks, a few key factors should be considered when evaluating a bank’s attitude towards cryptocurrency. By considering these factors, customers can choose a bank that supports their digital asset investments and is willing to help them navigate the complex world of cryptocurrency.