The U.K.'s Crypto and Digital Assets All-Party Parliamentary Group has asked banks to explain their approach to providing banking services to crypto and digital asset businesses.

In a “Dear CEO” letter, co-chairs Gurinder Singh Josan, a Labour MP, and Ed Vaizey, a Conservative peer, said they had heard repeated reports of crypto and digital asset firms struggling to open accounts with U.K. banks. They also said they had heard that several banks had introduced restrictions on crypto-related payments and transactions.

British banks that have imposed restrictions on crypto-related payments include HSBC, Nationwide, NatWest, Santander UK and Starling Bank. The institutions have generally cited fraud prevention and consumer protection concerns when implementing such limits.

The group said access to banking services could be one of the biggest barriers to growth for U.K. crypto and digital asset businesses and could undermine the success of the country's forthcoming crypto regime. The U.K. has been building out its digital asset regulatory framework following the Financial Services and Markets Act 2023, which expanded the regulatory perimeter to encompass cryptoasset activities, with further consultations underway covering fiat-backed stablecoins and broader market rules.

“We are concerned that limited banking access could ultimately make it harder for licensed firms to grow and could impact the decisions of firms considering investing in the U.K.,” the APPG said.

Difficulties securing banking relationships have long been a challenge for crypto industry participants, with the systematic debanking of firms and individuals, particularly in the U.S., often referred to as “Operation Chokepoint 2.0.”