• Thu. Apr 18th, 2024

Lobby Group Calls For Crypto Whitelist To Address UK Crypto Bank Fears

Mar 23, 2023

CryptoUK, a United Kingdom-based lobby group, is calling for a crypto safelist to enable banks to know the registered crypto firms. Thus, the banking sector won’t shut off their services to all crypto firms based on the assumption that they are not registered.

This call comes after the US banking sector made the headlines following the collapse of three crypto-friendly banks.

Concerns Over Cryptocurrency

Per reports, British banks revealed that they are keeping crypto customers away from their services for protection following the recent bank contagion that rocked the global banking system. The United Kingdom faces fears over banks’ refusal to offer services to legitimate crypto platforms.

Some major financial institutions state that they have suspended crypto exposure for the good of their customers. Due to this, CryptoUK, the major crypto lobbying group in the UK, has called on the country’s regulators to make the names of registered crypto companies available to banks.

On Tuesday, Su Carpenter, CryptoUK’s director of operations, reportedly sent a letter to Andrew Griffith, the UK Economic Secretary. In the letter, Su stated that blanket bans and restrictions on funds transfer from UK banks to crypto trading firms would undermine the government’s ambition to transform the country into a crypto hub.

Moreover, another letter to the Financial Conduct Authority (FCA) and the Payment Systems Regulator also called for urgent actions from the two agencies. The collapse of three US-based banks, Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank, has raised concerns from observers and lawmakers over an agenda targeted at the crypto space.

Critics believe the crypto industry is being punished through the traditional financial sector. Many likened the recent event to what previously happened to gun sellers in the United States.

Will Banking Crisis Strengthen Crypto Outlook?

Crypto experts believe that many individuals and entities will now appreciate the importance of having alternatives to the traditional banking system after the recent debacle. According to reports, the medium to long-term position of the crypto market was recently reinforced following the turmoil in the banking system that has shaken the core of the US financial sector.

According to David Duong, Coinbase’s head of institutional research, crypto has shown some resilience partly due to technical reasons. Furthermore, people now appreciate the value of cryptos for financial settlements and other uses.

Duong also noted that crypto, especially Bitcoin, offers alternatives in case the traditional finance sector fails. This is evident in the recent surges in the prices of digital assets.

The reports argued that the underlying technology behind cryptocurrency and smart contracts proves the poor risk management inherent in the technology powering traditional financial institutions.

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