HSBC, Nationwide Building Society, and other banking heavyweights in the UK are reportedly implementing a new set of restricting rules aimed at purchasing cryptocurrency.
The move comes amid a chaotic year for the crypto industry, which witnessed the failure of several industry giants.
Same Old Song
According to a Bloomberg coverage, the biggest banking institution in the United Kingdom – HSBC – banned clients from buying cryptocurrencies via their credit cards, citing “possible risks.”
Nationwide – another leading British bank – imposed the same restriction and applied a daily limit of £5,000 (nearly $6,000) on debit-card purchases of digital assets.
Lloyds Banking Group Plc, Banco Santander SA, and Natwest Group Plc have already announced such rules. Santander’s customers, for example, have a £1,000 ($1,200) limit per transaction and a total limitation of £3,000 ($3,600) in any rolling 30-day period.
The stricter stance on digital assets comes as a response to the numerous collapses in 2022, which led to multi-billion losses. The crash of Terra/LUNA in May was the first major blow, which was later followed by the bankruptcies of Three Arrows Capital (3AC) and Celsius Network.
The demise of FTX (one of the leading cryptocurrency exchanges once valued at $32 billion) in November was undoubtedly among the most tragic events for the industry. It washed out the investments of over 1 million creditors as some well-known names that had exposure to the platform include Apple, Amazon, Google, Netflix, American Airlines, Deutsche Bank, Marriott International, and many more.
The government entities of the United Arab Emirates (UAE), Japan, Australia, Hong Kong, and the central banks of Cyprus and the Bahamas got burned, too.
In addition, FTX’s collapse triggered a massive domino effect, negatively impacting the operations of many firms. Genesis, BlockFi, and Midas Investments filed for bankruptcy protection recently.
An Attack on Multiple Fronts
The government of the United Kingdom announced intentions last month to impose pertinent regulations on the local crypto industry, thus preventing another adverse event.
The proposed rules will not cease technological development and will aim to ensure maximum security for investors.
“We remain steadfast in our commitment to grow the economy and enable technological change and innovation – and this includes cryptoasset technology. But we must also protect consumers who are embracing this new technology – ensuring robust, transparent, and fair standards,” Andrew Griffith – Economic Secretary to the Treasury – stated.