Freezing accounts, stopping pound recharges and withdrawals, are major British commercial banks hostile to Bitcoin?

Cryptopay is a successful Bitcoin broker with more than 200,000 active users worldwide. However, under pressure from policy, the company announced its withdrawal from the UK market on February 1 this year. The UK banking industry has recently carried out policy reforms - stopping the pound recharge and withdrawal business.

Cryptopay is the latest victim of the UK Bitcoin sector

Since Bitcoin was launched in the UK, it has been difficult to convert digital currencies into pounds. Cryptopay offers customers a Bitcoin debit card that allows users to deposit and withdraw cryptocurrencies more easily and efficiently, similar to the bank's operating procedures.

Although the British government is a staunch supporter of blockchain technology, some commercial banks are still constantly crowding out Bitcoin exchanges and restricting their withdrawal services. In addition to the restrictions on Bitcoin activities of some individual users, after the bank policy update, companies involved in Bitcoin business such as Cryptopay have been pushed further and further away. Recently, Cryptopay sent an email to users, saying that the company had to completely stop its business in the UK due to the new bank regulations:

We regret to inform you that due to the update of bank policies, Cryptopay will no longer provide GBP deposit and withdrawal services from February 1st.

Cryptopay is just one of the victims of this incident. I believe that many other Bitcoin companies in the UK have faced development obstacles or completely stopped their services.

Because freedom is the innovation that Bitcoin promotes, the increasing number of users adopting this payment method also poses a threat to commercial banks; they express their dissatisfaction by closing the accounts of individual and corporate users without their knowledge.

Bitcoin users and businesses are targeted

Take Charles Bartlett, for example. He was a customer of Barclays. He had his account closed without prior notice after trading in Bitcoin. Barclays’ response to its customers’ Bitcoin trading activities was overly aggressive. A week later, Bartlett received a notice from the bank saying that he was no longer welcome to open an account with the bank.

Although Barclays may be the institution that has angered Bitcoin enthusiasts the most in the UK, it is definitely not the only bank that has taken a harsh approach to Bitcoin transactions. It is reported that Lloyds Bank also took similar actions in early 2016. A customer of the bank said on Reddit that he bought Bitcoin with an account at the bank, but his account was frozen without any notice.

In the UK, Bitcoin users are not the only ones who have experienced the same thing. Bitcoin companies are also involved. CoinJournal (a Bitcoin information website) had its bank account cancelled without any reason in October 2016. The culprit was still Barclays. Oliver Carding, the founder of CoinJournal, said that he was shocked that Barclays Bank actually regarded Bitcoin activities as a threat and never gave a reasonable explanation for their account status:

We don't do a lot of business... and the amounts involved are small, but it's surprising that they considered our account to be high risk. When we asked which rule we had violated, they didn't give us a clear explanation and just told us to check the customer terms.

Trading outside the banking system

Obviously, the only way out of the clutches of these mainstream financial institutions is to use a P2P trading service platform such as LocalBitcoins, whose trading volume is growing in the UK, or Mycelium's internal market. Since exchanges such as Cryptopay are no longer a viable option, companies and individuals who need to trade Bitcoin can choose P2P services.

This particular system works like this: reputation is built among individual users through service feedback. After the buyer initiates the payment, the money is transferred to the seller through a bank or cash transaction, and then the seller will issue the Bitcoin. This is essentially an option to get rid of the control of centralized companies.

Nevertheless, the new rules of the Bank of England have indeed had a negative impact on both users and Bitcoin exchanges, who have been excluded by banks. It is recommended that Bitcoin enthusiasts or users switch to some popular websites and avoid disclosing any transaction information about Bitcoin to avoid being delisted from banking services.

Promoting the popularity of Bitcoin

While commercial banks are reluctant to face the financial innovation brought about by Bitcoin, they are likely to eventually be forced to accept the changes brought about by the public's interest and acceptance of Bitcoin. Our challenge to banks aims to change their attitude towards Bitcoin activities by increasing the acceptance of Bitcoin payments in the personal and corporate sectors, thereby reducing the need to exchange pounds.

SMEs, who have been affected by the arrogant attitude of the banking sector, should take up the responsibility and widely accept Bitcoin and its underlying ecosystem. Royal Bank of Scotland (RBS) marginalized small businesses during the financial crisis and profited from it. SMEs should stand up against market monopoly and fight back by participating in the world's most valuable cryptocurrency economy.

Entrepreneurs who believe in the potential of Bitcoin (i.e. personal wealth) should start accepting and promoting Bitcoin as a payment method. A physical market where Bitcoin can be used to buy daily necessities is a good start. If Bitcoin is to exist without the British banking industry, widespread adoption of Bitcoin is the long-term strategy, otherwise Bitcoiners will only be suppressed by the banks.