UK crypto inquiry targets banking access under new Labour PM
A UK parliamentary group has launched an inquiry into crypto businesses' inability to secure bank accounts, a practical bottleneck that threatens to undermine the country's ambition to become a global digital asset hub under its newly elected Labour government.
The Crypto and Digital Assets All-Party Parliamentary Group announced an inquiry on Tuesday to investigate why crypto firms struggle to open and maintain UK bank accounts. Chaired by Lord Vaizey of Didcot and Labour MP Gurinder Singh Josan, the probe will also review transaction restrictions imposed by traditional banks.
The investigation targets a fundamental friction point for the industry. "Access to banking services is fundamental for any legitimate business, and where unnecessary barriers exist they have the potential to hinder growth, investment and innovation,” the APPG said.
The inquiry arrives just weeks after the UK published its new crypto regulatory framework, which is scheduled to take effect on October 25, 2027. Lawmakers are concerned that a lack of basic banking infrastructure could render the incoming rules ineffective for attracting international capital. "With the publication of the UK's new crypto regulatory framework, now is the right time to examine whether any remaining barriers could undermine that ambition as the regime comes into force next year," the group stated.
New government, new uncertainties
The probe coincides with a major political transition as Labour Party leader Andy Burnham assumed the office of prime minister on Monday. Burnham immediately announced the scrapping of the previous government's centralized digital ID scheme to redirect funding toward cost-of-living measures.
While local experts warned the move would leave the UK lagging globally, industry figures argued it was a necessary pivot to more modern technology. "The technology has moved on, and there's now a better way: credentials held in a secure wallet on the citizen's own phone, not on a state server," said Stefan Deiss, co-founder and CEO of The Hashgraph Group. "Pause the old model, but don't lose the ambition."
Market participants are now looking to John Healey, whom Burnham named as chancellor of the Exchequer, for regulatory continuity. Jonathan Herbst, Global Head of Financial Services at Norton Rose Fulbright, noted that international firms evaluate the UK based heavily on the stability of its regulatory environment, not just the substance of its rules. "Areas such as capital markets, fintech, digital assets and sustainable finance will continue to be important tests of that commitment," Herbst said.
The APPG is accepting written evidence from the banking, payments, fintech, and crypto sectors between July 21 and August 31. The group will compare the UK's banking access issues with approaches in the US, Hong Kong, Australia, and the EU before publishing a final report with government recommendations.
