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“Threat and opportunity”: British banks speak up against Bitcoin for the second time

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First, an official submission. Now, a report. The British Banking Association (BBA) is not happy about Bitcoin’s growing popularity and is not afraid to show it.

Digital Disruption: UK Banking Report” is the title of the document recently released by the association, which looks “at the challenges and opportunities from the digitisation of banking”. The report includes a section dedicated to cryptocurrencies and how this technology is changing how people see money transactions and fiat currency.

“Digitisation is changing many industries across the world and altering the way we as individuals and companies operate. Banking is no different,” the report starts by saying.

BBAAccording to the study, “the number of people going into branches to do their banking is falling dramatically  – by around 30% in the past three years – and visits are often now for detailed conversations rather than straight forward transactions. New products, such as cheque imaging, will reduce the need to go into a branch still further. Likewise, contactless cards, faster payments and Paym diminish the need to use cash. Banks are reconfiguring their branches and call centres to deal with these developments.”

Several elements add to this process and one of them is digital money.

“Cryptocurrencies increasingly look like becoming ubiquitous challengers to more familiar, established currencies. And, as they grow in popularity, so too will the risks for banks.”

The British Banking Association recognizes the many advantages of Bitcoin’s development. “Bitcoin users can handle many of their daily payments needs themselves, without the need for interaction with banks, and avoiding the need to incur bank fees. In the same way, value stored in PayPal accounts moves outside of the bank’s payment systems, depriving banks of valuable payments revenue.”

However, the report also lists the many challenges faced by cryptocurrencies and its users. Digital money’s volatility and low market cap are two of these challenges, but the report also explains how cryptocurrencies enable illegal activities such as online drug trafficking.

Anthony BrowneThe BBA then refers how important it is for banks to act immediately, investigating Bitcoin’s technology and how to use it to improve the banking systemAccording to the BBA chief executive Anthony Browne, “for the banks, this digital revolution is not just a threat but also an enormous opportunity.”

“Although it is a challenge for banks, perhaps more importantly for the economy, customers and wider society, it is also a challenge for regulators and legislators. Banking regulation has quite rightly been tightened to ensure financial stability and to prevent a repeat of misconduct, such as mis-selling or breaches of money laundering regulations. But generally, digital firms are not regulated and don’t have to abide by the same rules. The danger is that the digital revolution will simply lead to misconduct and financial instability exploding outside the regulated banking sector in the unregulated digital sector.”


This is the second time the British Banking Association publicly speaks about cryptocurrency. The first episode happened earlier this year, in January, when the BBA issued a submission against BTC. The document was sent to the country’s Treasury and to the Chancellor of the Exchequer. At the time, the association said Bitcoin could facilitate the work of terrorists and their attempts to infiltrate the UK’s intelligence services.

Maria is an experienced journalist currently living in the UK. She has been writing about Bitcoin and the altcoin universe since 2013. She is also a member of the Lifeboat Foundation's New Money Systems Board and a big cryptocurrency supporter.

View all Posts by Maria Santos

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