Financial giants, HSBC Holdings and Nationwide Building Society in the United Kingdom have put forward a stricter policy limiting its retail customers for crypto purchases with their debit and credit cards.
This comes on the heels after the United States payment behomths, Visa and Mastercard decided to push back the launch of certain products and services related to cryptocurrency until market conditions and the regulatory environment improve. Both the companies have also paused their plans to build new partnerships with crypto firms.
It is likely that most of the companies are awaiting a clear regulatory framework related to digital assets amidst a crackdown on crypto focused companies by regulatory agencies all over the world. The situation seems dire, especially in the US, where the US Securities and Exchanges Commission (SEC) has targeted several crypto outfits over the past couple of months.
Global Banks Tighten Crypto Related Policies
According to reports, Nationwide revealed the company is applying daily limits of $5,965 on debit-card purchases of cryptoassets. Meanwhile, the financial institutuion said that users can no longer use their credit cards to buy crypto.
It looks like these financial service providers are adhering to the warnings issued by global regulatory bodies including the Financial Stability Board (FSB), the International Monetary Fund (IMF) and the Financial Action Task Force citing that cryptoassets can be hazardous to the traditional financial system. In an email statement, HSBC explained the recent move as,
“This is because of the possible risk to customers”
Crypto Specific Regulatory Policies Increase
Several other banks in the United Kingdom have already toughened policies regarding cryptocurrencies. The U.K. unit of banking giant Banco Santander, Santander UK, Lloyds Banking Group Plc and Natwest Group Plc among the other institutions that have implemented crypto-specific limits on UK customers over the last few years. In August 2021, HSBC suspended credit card payments to the largest crypto exchange, Binance, citing concerns about the exchange’s regulatory status in the country.
🚨#BREAKING: US SEC Chair Gary Gensler says crypto exchanges are not qualified custodians for investors assets.
⚠️ Says they can't be relied upon & must be highly scrutinized.
Calls for Congress to grant change to custody rule. pic.twitter.com/tZ8zNSGkDS
— The Roundtable Show (@RoundtableSpace) March 2, 2023
Furthermore, on March 3, SEC Chair Gary Gensler has again backed a proposed rule that would extend asset custody rules to more cryptocurrencies, claiming investors need more protection. As per the official press release, Gensler wrote the new rules would enhance protections provided by qualified custodians in light of new authorities granted by Congress in 2010. He also claimed that crypto exchanges are not qualified custodians for investors assets.