HSBC, the Nationwide Building Society and other UK banking heavyweights are reportedly rolling out a new set of restrictive rules aimed at buying cryptocurrency.
The move comes amid a chaotic year for the cryptocurrency industry, which saw several industry giants fail.
same old song
According to a Bloomberg coverageThe UK’s largest banking institution, HSBC, has banned customers from buying cryptocurrency through their credit cards, citing “potential risks.”
Nationwide, another leading British bank, has imposed the same restriction, applying a daily limit of £5,000 (almost $6,000) on debit card purchases of digital assets.
Lloyds Banking Group Plc, Banco Santander SA and Natwest Group Plc have already announced such rules. Santander customers, for example, have a limit of £1,000 ($1,200) per transaction and a total limit of £3,000 ($3,600) in any consecutive 30-day period.
The tougher stance on digital assets comes in response to the many crashes in 2022, which caused multi-billion dollar losses. The Terra/LUNA accident in May was the first big hit, which was then followed by the bankruptcies of Capital of the three arrows (3AC) and Celsius Network.
The demise of FTX (one of the leading cryptocurrency exchanges, once valued at $32 billion) in November was undoubtedly one of the most tragic events for the industry. It de-invested more than 1 million creditors including some big names who had exposure to the platform. include Apple, Amazon, Google, Netflix, American Airlines, Deutsche Bank, Marriott International and many more.
Government entities in the United Arab Emirates (UAE), Japan, Australia, Hong Kong, and the central banks of Cyprus and the Bahamas were also burned.
Furthermore, the FTX collapse triggered a massive domino effect that negatively affected the operations of many companies. GenesisBlockFi and Midas Investments recently filed for bankruptcy.
An attack on multiple fronts
UK government Announced intentions last month to impose relevant regulations on the local crypto industry, thus avoiding another adverse event.
The proposed rules will not slow down technological development and will aim to ensure maximum security for investors.
“We remain steadfast in our commitment to grow the economy and enable technological change and innovation, and this includes crypto-asset technology. But we must also protect consumers who are embracing this new technology by ensuring robust, transparent and fair standards,” said Andrew Griffith, Treasury Economic Secretary.
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