Chase UK, the digital banking subsidiary of JPMorgan Chase, recently announced that it will no longer allow its customers to purchase cryptocurrencies using debit cards or through bank transfers. The bank cited concerns over the risk of fraud to its customers from cryptocurrencies, pointing to data showing that fraud related to digital currencies has been on the rise. However, this decision has not been well-received by the crypto industry.
Coinbase CEO Brian Armstrong criticized Chase UK’s move, stating that it is not right for private companies to “de-platform” the crypto industry. Armstrong suggested that the U.K. government should take note of Chase UK’s decision, despite the country’s ambition to become a “Web3 and crypto hub.” He believes that the government should be the one to decide what is allowed and what is not.
Chase UK’s move to block crypto-related transactions is not an isolated incident. Other British lenders, such as NatWest and HSBC, have also taken similar steps to bar crypto transactions, citing the risk of fraud. Data from Action Fraud, the U.K.’s fraud reporting agency, shows that U.K. consumer losses to crypto fraud have increased by over 40% in the last year, surpassing £300 million for the first time.
While cryptocurrencies were originally created as an alternative form of money meant to bypass the need for traditional financial institutions, they have increasingly gained acceptance from mainstream financial entities. However, they have also been associated with illicit activities such as money laundering and illegal gambling due to their pseudonymous nature.
Crypto proponents argue that the industry has matured significantly and can be a legitimate part of everyday payments and trading. They believe that with proper regulation, cryptocurrencies can be integrated into the financial system. The U.K. government has been working on legislation to regulate retail trading in crypto assets. The Financial Services and Markets Bill is one example of legislation that includes provisions on cryptocurrency, but it is not comprehensive.
Countries around the world, including the U.K., are vying to position themselves as crypto-friendly jurisdictions to attract businesses. However, the U.S. has taken a tougher stance on cryptocurrency firms, with regulators increasing enforcement actions against companies.
Despite Chase UK’s decision, Armstrong hopes that it was a misunderstanding and that the bank will clarify its position in the coming weeks. He believes that the U.K. government’s goal of becoming a crypto hub should not be compromised. The industry is eagerly awaiting clear regulations that will provide certainty and foster growth in the crypto space.
