Nationwide, one of the biggest bank in the United Kingdom, announced a restriction on card payments to Binance, one of the world’s biggest crypto exchange.
“Payments to the cryptocurrency firm Binance using your Nationwide cards will be declined,” the bank said.
“Even with your direct consent in person or by telephone, we can’t remove the restriction and allow you to make a payment to Binance.”
This astonishing measure, which arguably illegally interferes with property rights and engages in anti-competitive practices, is for your safety the bank says.
“Our number one priority is, and always will be, keeping you and your money safe. This is why we have taken the decision to restrict card payments.”
Binance is one of the safest crypto exchange as far as it is known, with it experiencing no successful hacks of note while it maintains a SAFU reserve fund of $1 billion to cover potential hacks or other difficulties.
This is also one of the few crypto exchanges that has gone through significant scrutiny by this space, and it provides a Proof of Reserves showing its assets.
Naturally there are always risks with such intermediaries, but banks like Nationwide were bailed out by the taxpayer over a decade ago, so they’re not absolutely safe either.
Where reasonable risk is concerned, “safety” is probably not quite the real reason why this decision was taken with it unclear why it singles out Binance.
Unlike their government however, British banks have been a bit slow on the crypto front and used to be notorious for their anti-crypto stance.
Barclays still flags transfers to crypto entities as “suspicious,” a little hurdle that nonetheless falls short of this complete ban by Nationwide, albeit to one exchange.
HSBC on the other hand is looking to develop crypto services, while the UK government has announced plans to regulate crypto with those plans overall looking balanced.
From this Nationwide decision, it appears clear the UK government has to regulate banks as well.
France for example prohibits commercial banks from discriminating against crypto, that’s either through denying bank accounts or blocking payments.
Such measure has not been taken in UK despite their own Financial Conducts Authority, the equivalent of SEC, accusing banks in 2017 of engaging in anti-competitive practices.
Until such measures are taken, Nationwide clients can go to another bank. There are some very friendly ones nowadays. Revolut is a clear example, and although they’re not a full on bank in UK yet, they are in Europe.
There’s Germany’s BitPanda, which is like Revolut but initially started off with only crypto.
They both have a card you can use like a normal card for payments, but the UK government does really need to address this quasi law making by banks.
Update: A Nationwide spokesperson reached out to clarify: “The FCA issued a warning on Binance in June 2021. As a result they were blocked from receiving Faster Payment by their clearing bank and providers, like Nationwide, blocked card payments. Our change was made in July 2021, so it is not a recent change.”
They also disputed Nationwide received any bailout. The article has been amended therefore to state “banks like Nationwide.”
