British bank Santander joins a host of other banks in the United Kingdom to crack down on cryptocurrency citing scams and frauds as the major problem.
Next year, the bank plans to stop real-time payments to cryptocurrency exchanges.
Key Takeaways
- Santander announces that it will begin blocking real-time payments to cryptocurrency exchanges in 2023.
- Additionally, the bank imposed payment restrictions for exchanges that will go into effect on November 15.
- Customers can still use cryptocurrency exchanges to send money, receive money, and make withdrawals.
According to an email to customers that Reuters originally covered, the action is meant to shield users from scams.
Santander has not specified the exact date in 2023 when the modification will go into effect. The bank will apply a more constrained set of restrictions in the near future.
Starting November 15, mobile and online banking payments to cryptocurrency exchanges are restricted to a maximum of £1,000 per transaction and £3,000 each rolling 30-day period.
Customers can continue receiving money into their accounts from crypto exchanges.
The Financial Conduct Authority has warned about the dangers of investing in cryptocurrencies.
Notably, funds kept in clients’ cryptocurrency wallets are unlikely to be insured by the Financial Ombudsman Service and Financial Services Compensation Scheme.
Santander UK stated, “We want to do everything we can to protect our customers, and we feel that limiting payments to cryptocurrency exchanges is the best way to ensure your money stays safe.”
The bank announced that it would make additional adjustments to restrict or stop payments to cryptocurrency exchanges.
The technology known as Faster Payments allows real-time bank transfers for most UK bank accounts. Faster Payments’ owner, Pay UK, stated in an email that it was “working with regulators and the payments industry to develop and implement better protection for victims of fraud.”
Santander announced that it would keep preventing any payments to the cryptocurrency exchange Binance. This policy was implemented in July 2021 in response to a warning from Britain’s financial authority regarding the exchange.
Santander’s stance on cryptocurrency appears consistent with the FCA’s recent warnings.
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The FCA announced intentions to considerably tighten its laws on cryptocurrency advertising in August 2022, putting these in line with those conventional controlling assets like stocks and bonds.
Santander’s stance on prohibiting cryptocurrency transactions isn’t particularly distinctive among British High Street banks.
Many UK banks have taken a stance against cryptocurrency due to increasing reports of fraudulent activities using blockchain technology.
Most of the banks in this group are standard banks, including Lloyds, Nationwide, HSBC, and TSB Bank, but it also includes some of the more recent “challenger banks,” such as Starling Bank.
But not all British banks are avoiding cryptocurrency. A card that enables customers to pay for their goods and services in cryptocurrency was just launched by Neobank Revolut, which has been active in the UK since 2015.
Final Thoughts
Santander is one of the biggest banks in the United Kingdom. In 2021, it was the sixth-largest bank in the nation, with assets of €287 billion ($286 billion), according to Statista.
The move by Santander aims to protect its customers from fraudulent activities by scammers, which has gotten increasingly rampant since the introduction of cryptocurrency.
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