Circle’s vice president of European policy, Teana Baker-Taylor, has argued that the recent moves by United Kingdom banks to limit access to cryptocurrencies are absolutely wrong. She also claims these banks are now unbanking both companies and individual customers.
Further, Baker-Taylor alleges that UK banks have been denying crypto companies access to accounts and suspending those of individuals who buy cryptocurrencies.
Are United Kingdom Banks Actually Unbanking Crypto Buyers?
While Baker-Taylor did not provide any evidence that UK banks are closing the accounts of their clients who purchase crypto, there have been several claims shared on Twitter by account holders that had their accounts temporarily frozen due to their attempts to purchase crypto.
In February, most UK banks updated their policies, which saw restrictions imposed on crypto transactions. At the time, NatWest Group CEO Alison Rose said his bank decided to block customers from buying crypto assets to shield them from the volatility of that market.
Spanish bank Santander, which enjoys a significant market share in the United Kingdom, capped transfers to crypto exchange at just $1,230 last year. In March, NationWide limited card payments to cryptocurrencies to $5,900.
This situation pushed the director of CryptoUK, Su Carpenter, to deliver a letter to Treasury last month, warning that banks’ harsh restrictions could derail the crypto ambitions of the British government.
The banks’ new policies highlight fraud-related risks as one of the reasons they are limiting customers’ exposure to crypto. However, Baker-Taylor isn’t convinced, arguing that fraud is also in the traditional finance sphere.
Circle’s Troubles With TradFi
Circle, the issuer of USDC stablecoin, encountered problems with traditional finance (TradFi) in early March after its stablecoin’s cash reserves worth over $3 billion got stuck in the now-collapsed Silicon Valley Bank. As a result, USDC depegged to trade for as low as $0.88.
Following the crisis, the company’s CEO, Jeremy Allaire, said he found it ironic that for a very long time, there have been talks of shielding the banking sector from crypto, but now it’s the opposite, as crypto companies are attempting to protect the tokenized dollar from traditional finance system.
