FCA Report Highlights Talks Between Banks and Crypto Firms Amid Rising Debanking Worries
The UK’s Financial Conduct Authority (FCA) has initiated talks between banks and crypto firms experiencing difficulties in accessing banking services, according to a recent report addressing the issue of debanking in the country.
The report came after TV personality and former politician Nigel Farage this summer accused his bank of closing his bank account over his political views, and revealed that common reasons for account closures included financial crime suspicions, due diligence concerns, and inactive or dormant accounts.
I will soon be launching an exercise to gather together all of those that have been de-banked.— Nigel Farage (@Nigel_Farage) July 26, 2023
We will build a very large database of cases to find out which banks are worst offenders.
This is how we will make a fundamental change in the system. https://t.co/opYrB0phQ2
The FCA’s report is based on data gathered from 34 financial institutions and payment providers, and highlighted that certain payment providers do not grant banking access to the crypto industry.
Although the FCA has limited influence in assisting businesses in obtaining bank accounts, it appears the regulators now has taken steps to ensure market integrity.
We’ve set out key insights from our work on the provision of payment accounts to personal customers, businesses and not-for-profit charities, and outlined our next steps.— Financial Conduct Authority (@TheFCA) September 19, 2023
You can also view our letter to the Chancellor on the provision of banking services. https://t.co/QW6dYQkfRK
The report emphasized that dialogue between crypto firms and banks can promote a balanced approach, clarify decision-making processes, explore risk mitigation strategies, and ensure fairness.
Contrary to earlier expectations, the report found no evidence that banks closed accounts due to customers’ political stances, although it noted that more work is needed to be sure.
“As we undertake that work, the time is also right for a debate on how we balance access to bank accounts with the threat of financial crime, as well as firms’ reasonable risk and commercial appetites,” FCA Chief Executive Nikhil Rathi said in a comment, while adding:
“An important question for policy makers is whether all individuals, businesses and organisations should have the right to an account, as is the case in some other countries.”
The UK government has taken a pro-crypto stance in recent years in an attempt to position the country as a global digital asset hub post-Brexit.