As digital currencies become ever more popular and start to gain a foothold within the mainstream markets, it has emerged that some mortgage lenders have begun to turn down capital that has been raised through cryptocurrencies such as bitcoin.

Some major banks and high street lenders have started to refuse profits gained through bitcoin investment, even though in order to be accepted for a mortgage they are first exchanged into sterling. The fear is that any money brought to the table in that manner will be in breach of anti-money laundering regulations.

There is no regulation around cryptocurrencies at the moment from traditional central banks, and institutions such as Nationwide, Santander and others have stated that they will not accept deposits that are believed to come from bitcoin and other digital currency sources.

For mortgage regulation within the UK there is no law stating that sterling that has been converted from a cryptocurrency cannot be used to put down a deposit, in order to acquire a mortgage. In fact, other banks and building societies have said that they will accept deposits garnered from cryptocurrencies, including Yorkshire Building Society.