Is It Time To Remove UK Banks From the Bitcoin Ecosystem?

By February 13, 2017Bitcoin Business
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Over the past few years, a lot of bitcoin exchanges had to deal with issues related to UK banks. Even though bitcoin is legal in an unregulated manner in the UK, banks are not too keen on cryptocurrency. Some experts argue it is due time to take British banks out of the bitcoin exchange industry altogether. Doing so would have catastrophic events, though, as it limits both deposit and withdrawal options for a lot of users. Then again, with banks continuing to deny service to bitcoin companies, something has to change sooner or later.

Quite a few bitcoin exchanges have seen their share of issues with UK banks. Just a few weeks ago, bitcoin broker Cryptopay announced they are no longer accepting GBP deposit and withdrawals. That is not entirely surprising, as the company deals with UK bank issues on a regular basis. After so many issues, their decision to get rid of GBP support altogether makes some sense. British users of the Cryptopay platform are disappointed by this decision, albeit there is little that can be done.

CryptoPay is not the only exchanges taking such a drastic decision. Nearly a dozen other exchanges have seen issues with UK deposits and withdrawals throughout their existence. For some reason, the UK banking system does not take kindly to bitcoin companies. It is not unlikely that the situation will only get worse once the Brexit occurs. British bitcoin enthusiasts have no other feasible option at their disposal, but to use local exchanges who still support GBP transactions.

UK Banks Continue To Oppose Bitcoin Companies

Peer-to-peer bitcoin services are gaining more popularity all across the UK, though. Since there are no companies involved in handling consumer funds, sellers and buyers have a bit more freedom to trade bitcoin. Payments often occur through UK banks, but without making any mention of bitcoin whatsoever. At the same time, there is some degree of anxiety over how much longer this ecosystem will continue to exist moving forward.

In the end, it is not surprising fiat-to-bitcoin services don’t work all that well in some regions. Fiat currency is centralized and controlled by banks, whereas bitcoin is the exact opposite. Opposing bitcoin companies is not the best idea for any region looking to position itself as a fintech hub, though. Considering how the UK is focusing a lot of effort on fintech right now, they should open up to bitcoin as well. For now, that will not be the case anytime soon, though.

A solution has to be created which makes moving fiat in and out of bitcoin exchanges more frictionless. That is much easier said than done, though. People who receive bitcoin should not necessarily look for ways to convert to fiat immediately, yet most still do so. No one is pressured into cashing out bitcoin, albeit few people are willing to hold onto bitcoin for the long term. Decentralized exchanges are direly needed to alleviate concerns related to UK banks, that much is certain.

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