Danske Bank says “no” to cryptocurrencies
Danske Bank today issued a statement regarding its position on cryptocurrencies.
The bank concedes that cryptocurrencies represent a significant digital innovation in financial services and it recognises that there is a significant global market for crypto currencies and that many customers find cryptocurrencies interesting. However, as a financial institution, Danske Bank for several reasons maintains a very cautious approach towards cryptocurrencies.
The bank enlists the following reasons for its cautious approach regarding cryptos:
“Trade in cryptocurrencies is not always sufficiently transparent, which may make it difficult for us as a financial institution to meet our obligations to fight financial crime and money laundering.
Trade in cryptocurrencies is only partially regulated by financial regulation and consumers therefore do not always have the consumer protection associated with regulated financial products.
Pricing of cryptocurrencies is opaque and highly fluctuating, and as an investor, you have limited insight into how the market develops and what drives the price.
Transactions with certain cryptocurrencies require very large amounts of computing power that are extremely energy intensive, and this is in not in line with Danske Bank’s ambition to promote sustainable development together with our customers”.
At present, it is not possible to trade cryptocurrencies or financial instruments based on cryptocurrencies on Danske Bank’s trading platforms. The bank generally advises against investing in such assets.
“Thus, we cannot currently offer investment advice on cryptocurrencies or financial instruments based on cryptocurrencies,” the bank says.
Danske Bank thus favours developments under the new EU legislation Regulation of Markets in Crypto Assets (MiCA), as it is expected to ensure better regulation of the market for cryptocurrencies and other types of cryptoassets such as stablecoins.
For customers that deposit funds that stem from investments in crypto currencies, the bank will treat them in the same way as deposits of funds from other types of investments. Accordingly, Danske Bank may accept the deposit if it complies with applicable law and follows anti-money laundering procedures.
“Furthermore, we do not block the use of a credit card issued by Danske Bank in connection with the trading of cryptocurrencies. As with all other credit card transactions, customers must follow applicable anti-money laundering procedures and comply with applicable laws,” the bank concludes.