National Westminster Bank (NatWest), one of the UK’s largest retail and commercial banks, will no longer offer its services to businesses that accept or trade cryptocurrencies, The Guardian reported yesterday.
We have no desire to work with customers, whether it’s acquiring them as new customers or having ongoing relationships with people whose primary business is trading cryptocurrencies or other cryptocurrency transactions, Morten Friis, head of the bank’s risk committee, said at a shareholder event.
In the report, Friis notes that NatWest ultimately views digital assets as very risky and therefore plans to approach them with caution. The Bank will also monitor any regulatory changes and will of course react as the situation develops.
Adjustable grey area
As mentioned earlier, there is some uncertainty in the UK regarding the regulation of cryptocurrencies. In January, for example, the Financial Conduct Authority (FCA) also warned of the high risks associated with digital assets, even advising consumers to be prepared to lose all their money in transactions in the crypto environment.
The FCA is aware that some firms offer investments in crypto assets or loans or investments linked to crypto assets that promise high returns. If consumers invest in such products, they should be prepared to lose all their money, the FCA said in a statement at the time.
In this context, it is not surprising that a large bank like NatWest would want to protect itself from potential risks until the regulators provide clearer guidance. Especially as crypto investments are not covered by any of the UK’s customer protection schemes, meaning customers have no recourse in the event of a loss.
If @NatWestGroup hadn’t left @coinbase in 2017-18, the stock price would be 3x higher today #crypto https://t.co/zD5xx2vHSJ
– Ajit Tripathi (@chainyoda) April 22, 2021
At the same time, well-known companies like Lush, WeWork, and Tesla have recently announced (or already implemented) cryptocurrency payment options in addition to traditional payment options.
According to Friis, NatWest also plans to implement additional financial crime checks for all retail customers who want to trade in cryptocurrencies.
We expect to continue to take a cautious stance, but we will continue to monitor the market, he concluded.
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