For those buying Bitcoin as a pastime, as an investment or to trade, finding a suitable Bitcoin Friendly Bank that accepts UK account holders is essential. Owning Bitcoin can be considered risky enough, without the additional risk of banking complications in the UK.
In this article we seek to explore some of the issues faced, and the options available.
Bitcoin Trading Bank Account
Trading can be Crypto-to-Crypto (XRP-BTC-ETH for example), or Crypto-to-Fiat (BTC-GBP). Traders will consider all different pairings.
The same can be said of Bitcoin Brokers, who either collect funds in Fiat, or need to send funds in Fiat onwards when the transaction completes.
In both these situations, one of the major pre-requisites for a bank account is a ‘risk appetite’ that allows frequently funds in and funds out to a range of cryptocurrency sources, such as exchanges, OTC desks and Escrow.
A specific Bitcoin Trading Bank Account is required to prevent the issues we discuss below.
Buy Bitcoin UK Bank Transfer
The first point to consider is your original purchase of Bitcoin if completed via fiat (GBP).
Naturally, if you trade Ethereum for Bitcoin then this is not a transaction the bank are part of, therefore not a concern.
Using your bank to buy Bitcoin can be problematic. Many banks have blocked all purchases of Bitcoin via Debit and Credit cards, leading some exchanges to require funds to be sent internationally to make a purchase, or brokers being required to purchase at an increased cost.
Over the past year or so, buying Bitcoin with a UK bank transfer is getting easier, as regulated provided are introduced to the market, and checks on source of funds improve. However, the underlying skepticism of Bitcoin from the vast majority of UK banks remains.
Do Blockchain and Banks need to exist together? Read about Blockchain in Banking and the future of banking.
Bitcoin to Bank Account UK
As we all know, UK banks won’t accept Bitcoin itself (they don’t view Bitcoin as a currency), therefore Bitcoin Traders and Investors have to liquidate their Bitcoin via a Broker or Exchange prior to moving the proceeds to a bank.
The process of liquidating the Bitcoin is reasonably straightforward. The Bitcoin market is highly liquid (lots of buyers and sellers). The complication arises when you attempt to deposit the GBP for the Bitcoin you have sold.
Withdraw Bitcoin to Bank Account
Bitcoin that is converted to fiat needs to be withdrawn to a bank. Most cryptocurrency enthusiasts do not wish to leave cash balances on an exchange once it has been traded for fiat. The majority of people simply wish for their money to be in their own bank account, irrespective of the security concerns around certain exchanges.
Some banks refuse to accept funds they know are a result of a sale of Bitcoin. Major exchanges and brokers can be known to the banks, which can see funds rejected.
In some cases, bank accounts are closed outright. This leaves UK account holders with the ultimate in inconvenient problems that arise when using a bank that is not Bitcoin Friendly.
Another core problem is that of delayed funds, where the bank request further documentation on source of funds. Depending where the funds come from, this can cause a lengthy delay running into weeks.
When the source of funds is proved, the bank may still reject the payment, usually citing ‘risk appetite’ for crypto transactions.
Read more about opening a Cryptocurrency Bank Account.
Best Bank Account for Bitcoin
Its hard to say who the ‘best’ are in an emerging banking market. However, a few Bitcoin friendly options to start with based internationally are; Silvergate in the US, Turicum in Gibraltar and AgriBank in Malta.
Some international banks do onboard people and entities from the UK.
Bitcoin Friendly Bank UK options do exist!
Overall, Bitcoin Friendly Bank options for UK based individuals and companies are limited, but not non-existent.
Some banks are happy to accept funds derived from cryptocurrency transactions for those based in the UK. This depends on your circumstances. For example, bank account options can vary based on if you trade or invest, deposit large or small sums, have an existing relationship and the people or companies you buy or sell with.
Harvex can quickly assess your options for you – and point you to the right bank for you.
Please check out our Bitcoin Bank Account FAQ’s, or contact the team at Harvex firstname.lastname@example.org