British investors who want to cash out of cryptocurrencies into pounds are facing the hurdles of having to make international money transfers, being charged high fees and drawing the suspicion of banks, according to a Financial Times report.
Sales of cryptocurrencies, which include bitcoin and Ethereum, are commonly made through platforms known as exchanges. But no cryptocurrency exchange currently has a relationship with a UK bank.
Investors have to convert their cryptocurrency to euros or dollars and then send them to the UK as a foreign transfer, which often attracts fees.
“The most complicated part of cashing out bitcoin for UK investors now is the fact that exchanges do not have a relationship with UK banks,” said Obi Nwosu, chief executive of cryptocurrency exchange, Coinfloor.
“European banks are more comfortable with the idea of banking with bitcoin companies and UK banks are taking a lot more time to get comfortable. Europe and the US have more banks, and it does tend to be the smaller banks who have been more open to cryptocurrencies,” he added.
He said British banks he had dealt with had often said that the virtual currencies, which have recently rocketed in value, did not fit their risk thresholds. The rise in interest in cryptocurrencies, as well as the accompanying increase in transaction volumes, has also made banks wary.
“[They] are asking more questions again,” he said, adding: “I’ve cashed out a couple of times to try it and I can see why this might put people off,” said Mathew Ellwood, a 33-year-old finance professional. “I had to send £10 to a Lithuanian company in order to set up a relationship with the exchange I was using. When I tried doing it from my NatWest current account they advised me not to.”
The anonymity of virtual currencies has raised concerns that they may be used for money laundering and other criminal purposes, making banks nervous about breaching regulations.
Frontpage August 23, 2019