A new survey by the UK Cryptoasset Business Council found widespread blocking and delays on transfers between UK bank accounts and crypto exchanges.
The report drew responses from 10 major UK-based centralised exchanges serving millions of customers and processing hundreds of billions of pounds.
Eight out of 10 exchanges reported a rise over the past year in customers experiencing blocked or restricted bank transfers.
UKCBC estimates that around 40% of attempted transactions to crypto exchanges are either blocked or delayed by banks.
One UK-founded exchange reported nearly £1 billion in declined transactions over the past year due to bank-side payment rejections.
Most high-street banks were found to impose strict limits or outright blocks on transfers to crypto exchanges.
Several challenger banks allow payments but apply tight caps or short-term limits.
The report said restrictions are often applied universally without distinguishing between FCA-registered firms and higher-risk platforms.
“We acknowledge that fraud is a legitimate concern but there is widespread concern that banks are using compliance as a proxy to hinder sector growth,”
Simon Jennings said.
All surveyed exchanges said banks provided no clear explanations for blocked payments or account restrictions.
Exchanges reported growing customer frustration, with one saying 60% of users expressed anger over banking friction.
UKCBC warned that debanking practices risk undermining innovation and pushing crypto businesses overseas.