Bitcoin Ban Upheld at Danske Bank Amid Growing Client Demand
Danske Bank A/S says it won’t lift a ban on trading Bitcoin and other cryptocurrencies on its platforms, despite growing interest from clients.
Denmark’s biggest bank pointed to a lack of transparency and regulation in crypto trading, in a statement on its website. It also warned of volatile and “opaque” pricing, and noted that the carbon footprint of mining cryptocurrencies is at odds with Danske’s goal of doing sustainable banking.
“We recognize that there is a significant global market for crypto currencies and that many customers find cryptocurrencies interesting,” the bank said. “However, as a financial institution, Danske Bank for several reasons maintains a very cautious approach towards cryptocurrencies.”
Danske, which is still being investigated for money laundering in the U.S. and Europe, is particularly sensitive to the risk of crypto assets being used for financial crime. Meanwhile, Bitcoin and its peers are growing increasingly popular as several corners of Wall Street provide services that allow customers to trade them.
The head of Sweden’s financial regulator, Erik Thedeen, warned earlier this week of a “significant risk” that crypto assets may be used for criminal purposes. “Financial firms need to ask themselves whether they really want to invest in or encourage the growth” of such assets, especially when they have “no obvious valuable legitimate use,” he said.
Thedeen also said that carbon emissions caused by Bitcoin mining are another reason why firms “should think carefully” before touching such crypto assets.
In the Nordic region, where cash is being replaced by digital payments at a faster pace than in most other parts of the world, the biggest banks are united in their skepticism toward cryptocurrencies. Nordea Bank Abp also bans Bitcoin, and won’t even let employees trade it.
Danske said much hinges on the extent to which cryptocurrencies might one day be properly regulated. Should that ever happen, the bank will review its position, it said.
Read more: Bitcoin Too Risky to Touch Without Regulation, Nordea Says
Danske said it was waiting to see how developments under new European Union legislation, Regulation of Markets in Crypto Assets (MiCA), progress.
“We continuously monitor developments in the area of cryptocurrencies, and as the cryptocurrency market matures and is further regulated, we will review our position,” it said.
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