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UK banks 'staying away' from cryptocurrencies

(Image credit: Image Credit: Geralt / Pixabay)

British banks are reportedly staying away from companies that handle cryptocurrencies

According to the FT, the ambition of British banks to be see as a global hub for the fast-growing fintech sector are being questioned as companies that wanted to do business in the UK are now being force to opt for other countries like Poland or Gibraltar.

According to companies working with cryptocurrencies, banks often see the new currencies as means of doing illegal business, following many reports that trade being carried out on the dark web is being done in this way.

“The moment you mention crypto to a bank, it’s like you are a drug dealer,” Iqbal Gandham, UK head of eToro, a social trading firm, told the paper.

Banks argue that the fields needs to be regulated, and heavily, before they would move in.

UK Finance, which represents British banks, said: “No regulatory regime is yet in place for virtual currencies. Firms’ own risk appetites will determine to what extent they engage with any firms engaged in virtual currencies.”

Tens of new companies trading cryptocurrencies have recently emerged, driven by the rise in the value of Bitcoin and other offerings. Bitcoin, the biggest and most popular of cryptocurrencies, has risen more than 400 per cent in value this year alone.

Start-ups are using them to fund their operations, through what’s called ICO – initial coin offerings. The practice has since been banned in China and South Korea.

The market value of all cryptocurrencies jumped from under $30bn at the beginning of the year, to more than $160bn today.

Image Credit: Geralt / Pixabay