Despite ‘Significant’ Demand, Denmark’s Biggest Bank Will Maintain ‘A Very Cautious Approach’
The Nordic region is simply staying away from crypto due to a lack of regulation in the sector.
Danske Bank says it won’t allow trading of Bitcoin and other cryptocurrencies on its platform despite the growing interest from its clients.
The reason for not lifting the ban on trading crypto is the lack of transparency and regulation in crypto trading, as per the bank's website. Denmark’s biggest bank also warned of volatility, “opaque” pricing, and the carbon footprint of crypto mining being at odds with its goal of 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.”
The bank is currently under investigation for money laundering in the U.S. and Europe.
Danske said it was waiting to see the developments to be made under new European Union legislation, Regulation of Markets in Crypto Assets (MiCA), and that it will review its position if crypto assets get properly regulated.
“We continuously monitor developments in the area of cryptocurrencies, and as the cryptocurrency market matures and is further regulated, we will review our position.”
Nordic Region Staying Away From Crypto
A Swedish hedge fund Volt Capital Management also said it wouldn’t invest in Bitcoin because they prefer a regulated market.
Nordea Bank Abp has also banned Bitcoin, saying it is too risky to explore without regulations and won’t let employees trade it either.
Earlier this week, the head of Sweden’s financial regulator, Erik Thedeen, further warned 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 when they have “no obvious valuable, legitimate use,” he said.
Not Everyone Is Onboard
Elsewhere, a Coinbase user complained on Reddit that he is having issues with withdrawing money from Coinbase to their Citibank account via instant debit card.
“They informed me that they are no longer accepting incoming credits from Coinbase or other cryptocurrency-related institutions,” wrote the user.
However, this isn't the first such incident. Back in 2018, four banks Citi, JPMorgan Chase, Bank of America, and Capital One, prohibited purchasing cryptocurrencies at the platform using their credit cards.
But now banks have started to get comfortable with crypto, with big giants like Goldman Sachs and JPMorgan offering crypto trading services to their clients.