HSBC and Nationwide Impose Daily Limits of £5,000 on Debit-Card Purchases of Cryptoassets
UK Banks, Nationwide Building Society and HSBC Holdings, have imposed new limits on retail customers’ access to cryptoassets, following industry scandals and regulatory warnings, according to Bloomberg on March 3. The building society will now apply daily limits of £5,000 ($8,052) on debit-card purchases of cryptoassets, and its credit cards can no longer be used to buy crypto. Meanwhile, HSBC has barred customers from making crypto purchases via its credit cards since last month, citing possible risks to customers.
The move comes after warnings issued by the Financial Conduct Authority (FCA) regarding the high-risk nature of cryptoassets. Several UK banks, including Banco Santander, Lloyds Banking Group, and Natwest Group, have already placed crypto-specific limits on customers in recent years. Most major banks have also implemented exchange-specific restrictions, with the world’s largest crypto platform, Binance Holdings, being the most popular target.
The collapse of crypto exchange FTX in November has raised fresh concerns about the dangers of cryptoassets. Global bodies such as the Financial Stability Board, the International Monetary Fund, and the Financial Action Task Force have repeatedly cautioned banks against inviting the risks that cryptoassets can pose to the traditional financial system.
Several US banks with close ties to the sector are also facing growing scrutiny. Crypto-friendly bank, Silvergate Capital, sank to a record low on Thursday after saying it was reviewing whether it can remain viable. Regulators, including the Federal Reserve, have warned financial institutions to be wary of “potential heightened liquidity risks” presented by certain sources of funding from crypto-related entities.
The move by Nationwide and HSBC to impose tougher limits on retail customers’ access to cryptoassets is a sign of growing concern about the risks associated with this volatile and largely unregulated sector. As more banks look to impose similar restrictions, it remains to be seen how this will affect the wider crypto market and the industry as a whole.
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