Nine of the UK's ten largest retail banks currently block or limit payments to cryptocurrency exchanges, and that is not expected to change once the country's long-awaited crypto licensing regime takes effect. Lenders including Virgin Money, Metro Bank, Starling Bank, TSB and Chase UK maintain outright blocks on both bank transfers and debit card payments routed to exchanges, while HSBC, Barclays and NatWest cap how much customers can move to their crypto accounts, according to reporting from The Block.
The restrictions predate the UK's new regulatory framework and, on current evidence, will outlast its rollout too. The full authorization regime under the Financial Services and Markets Act does not commence until October 25, 2027, and nothing in the rules obliges banks to open their rails to licensed crypto firms once it does.
What Changes on September 30
The Financial Conduct Authority has now published guidance intended to help firms understand exactly how that future regime will apply to their business, and clarify which activities will require FCA authorization. The guidance covers issuing qualifying stablecoins, operating a cryptoasset trading platform, dealing and matching trades on a proprietary basis, custody of client assets, and arranging staking services. The regulator finalized its underlying rules and guidance back in June 2026, and the government has since made targeted legal amendments, including limited exclusions and further clarity for certain technical service providers. A further consultation on targeted updates to the guidance is due in October.
Authorization applications formally open on September 30, 2026 and run through February 28, 2027, giving firms roughly five months to file before the regime commences the following October. For an industry that has spent years operating in a licensing gray zone, that window marks the first concrete on-ramp to full legal status in the UK market.
Banking Access Remains the Open Question
What the guidance does not resolve is the banking relationship at the center of the industry's complaint. UK Economic Secretary to the Treasury Lucy Rigby has said the government's expectation is that licensed firms should not face blanket restrictions once authorized:
Under the UK's new crypto regime, firms will need to be licensed by the FCA to provide relevant cryptoasset services, and the government would not expect such licensed firms to be subject to restrictions by banking services providers simply because of the sector they belong to.
That is a statement of expectation, not a binding requirement, and UK lawmakers reviewing the issue have described banking access as one of the single biggest barriers to growth facing domestic crypto and digital-asset businesses. An inquiry into the matter closed evidence collection on August 31, 2026, with no legislative fix yet attached to its findings. Crypto holders and firms have separately organized public pressure campaigns over the past year pushing banks to loosen restrictions, with limited visible effect on the institutions named above.
Related: UK Regulator Weighs Fund-Rule Exemption for Tokenized Gold
The gap between licensing and banking access is not unique to the UK, but it is unusually stark given how far the FCA's own framework has progressed relative to peers still drafting first-generation crypto rules. Regulators elsewhere in Europe have moved on parallel tracks this year — the House of Lords has separately backed a mandatory digital asset strategy for the country, a sign of political appetite for treating crypto as strategic infrastructure even as day-to-day banking access lags. Meanwhile, political donors tied to the industry have grown more visible in UK politics; two crypto billionaires recently handed Reform UK a record £72 million over two days, underscoring how much financial weight the sector is now willing to put behind favorable policy outcomes.
For firms preparing September 30 applications, the practical reality is that FCA authorization will confer legal status without guaranteeing the banking relationships needed to operate day to day. Whether that gap narrows once licensed firms start operating under the new regime, or whether banks continue treating the sector as uniformly high-risk regardless of individual firms' authorization status, is likely to become one of the defining frictions of the regime's first year.
