Britain's Nationwide Curbs Cryptocurrency Purchases by Customers

British lender Nationwide Building Society announced in an email to its members on Thursday that it had blocked its clients' ability to purchase cryptocurrencies.

Nationwide announced that it will prohibit credit card payments to cryptocurrency exchanges and would cap daily expenditures on adult current accounts at 5,000 pounds ($5,995). 

The building society claimed that the action was a reaction to regulatory worries about the risks associated with purchasing digital currencies. More business Benefits of Ethereum.

Why the prices surged?

According to directors from the unit, Nikkei Asia reported moment that cryptocurrency exchange Binance will have its custodial arm apply for a permit to give cryptocurrency services in Singapore" in due course."

Prior to a dramatic dip last year as investors fled riskier assets due to rising interest rates, cryptocurrency values soared in 2020 and 2021. Investor losses from a string of cryptocurrency collapses, including the FTX exchange, prompted calls for regulation of the industry. 

The declaration by Nationwide comes after similar actions by other UK banks. Santander (SAN.MC) announced in November that it would soon stop allowing UK customers to send any real-time payments to cryptocurrency exchanges as part of measures to protect customers from scams. Santander also set limits on the amount of money that customers could transfer to these exchanges.

The nationwide report 

Nationwide's website says the bank will continue to circumscribe payments made to the Binance crypto exchange, citing" similar action from other providers, media content and nonsupervisory query". 

Nationwide said it will not allow payments to crypto exchanges using credit cards and will limit adult current accounts to£, 000(S$, 064) of purchases per day. 

The structured society said the move was in response to nonsupervisory enterprises over the risks of buying digital currencies.

Cryptocurrency and FTX exchange

According to prior reports from Reuters, the US Department of Justice is looking into Binance for possible money laundering and sanctions violations. According to Binance, it constantly collaborates with regulatory bodies to answer any queries they may have.

Before a dramatic dip last year, as investors fled riskier assets due to rising interest rates, cryptocurrency values soared in 2020 and 2021. Investor losses from a slew of cryptocurrency disasters, notably the FTX exchange, prompted calls for regulation of the industry. 

The declaration by Nationwide comes after similar actions by other UK banks. Santander set limits on the amount of money consumers may transfer to cryptocurrency exchanges in November as part of measures to safeguard customers from fraud, and it said that it will shortly stop allowing UK customers to send real-time payments to cryptocurrency exchanges.

According to the Nationwide website, the bank will keep limiting payments to the Binance cryptocurrency exchange due to "similar action by other providers, media scrutiny, and regulatory uncertainty." 

According to prior reports from Reuters, the US Department of Justice is looking into Binance for possible money laundering and sanctions violations. According to Binance, it constantly communicates with regulatory bodies to answer any queries they may have. 

Both institutions cited the Financial Conduct Authority's warnings, which has long classified cryptocurrency as high risk. 

The lenders join Banco Santander, Lloyds Banking Group, and NatWest Group as organisations that have recently restricted British customers' use of cryptocurrencies. 

Being the largest cryptocurrency platform in the world, most major institutions have also adopted exchange-specific regulations.

The globally accepted market 

Global organisations like the Financial Action Task Force and the International Monetary Fund have repeatedly advised banks not to expose themselves to the risks that crypto assets can pose to the established financial system. 

Numerous American institutions with connections to the industry are coming under further scrutiny.

Conclusion

A crypto-friendly bank called Silvergate Capital plunged to a record low on Thursday after announcing that it was evaluating whether it could continue to operate. 

Financial institutions have been cautioned by regulators, notably the US Federal Reserve, to watch out for "possible heightened liquidity concerns" provided by some sources of funding from crypto-related organisations.