The largest commercial and retail financial institution, National Westminster Bank (Natwest), has labelled cryptocurrencies as high risk and refuses to serve commercial customers who accept digital assets as payment. Morten Friis, a member of Natwest’s board of directors, says the bank has no need to do business with this type of customer because Natwest has a cautious approach to technology.
Natwest will refuse to do business with companies that accept crypto-currencies
According to reports, popular UK financial and wealth management firm Natwest is refusing to serve professional clients who accept cryptocurrencies. The same bank that emerged in 1968 from the merger of Westminster Bank and National Province, and was subjected to scrutiny after its involvement in the 1987 stock market crash.
The report, written by theguardian.com’s banking correspondent Kalena Makortoff, explains that Morten Friis, a Natwest board member and head of the bank’s risk committee, has a negative attitude toward crypto assets. Friis notes that the bank has no traction with cryptocurrencies, and that digital assets are very risky from Natwest’s perspective.
We have no desire to work with customers, whether it’s acquiring them as new customers or maintaining ongoing relationships with people whose primary business is based on cryptocurrency exchanges or other cryptocurrency transactions, the bank’s chief risk officer stressed at the shareholder meeting on the 21st. April.
Friis further argued:
We believe that cryptocurrencies are high risk and therefore approach them with caution. This is an area where regulation is evolving and we will of course respond to developments as they occur.
Few banks choose to engage in crypto assets.
Natwest’s current position reflects the warning issued by the UK’s Financial Conduct Authority (FCA) in March. The Swiss Financial Market Supervisory Authority (FCA) has warned that young investors are taking big financial risks. Moreover, the current CFO of HSBC also has a negative attitude towards crypto assets. Essentially, HSBC has decided to ban investors from buying shares in companies that own bitcoin. Reports this week also show that HSBC is even having problems with Coinbase (CoIN) shares.
Natwest Bank was not without controversy, even outside the market routine, on Black Monday 1987. Ten years later, in 1997, Natwest Markets’ corporate and investment banking department reported that the banking group had lost £50 million. Further investigation revealed that losses had risen to £90.5 million, and with this further investigation confidence in Natwest quickly collapsed. However, the Bank of England (BoE) intervened and prevented top Nat West officials from resigning.
In 2016, Bitcoin.com News reported that Natwest was one of the first UK high street banks to introduce negative interest rates for its customers. According to reports at the time, only business customers would be affected by the new policy, but the announcement shocked the markets and sent confidence plummeting.
Many crypto asset advocates will say that Natwest is a perfect example of why bitcoin and a host of digital assets exist. Since the controversies of 1987, 1997 and 2016, the bank has lost public confidence until today. More recently, the Financial Conduct Authority (FCA) has brought criminal proceedings against Natwest for alleged non-compliance with money laundering regulations.
What do you think of Natwest’s explanation of the bank’s refusal to do business with companies that accept crypto assets? Let us know what you think in the comments below.
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