The large private and commercial financial institution National Westminster Bank (Natwest) has categorized cryptocurrencies as ‘high risk’ and refuses to serve corporate clients who accept digital assets for payments. Morten Friis, a Natwest board member, explains that the bank is reluctant to deal with these types of customers, as Natwest takes a “cautious” approach to this technology.
Natwest will refuse to do business with companies that accept cryptocurrencies
Reports indicate that popular UK financial incumbent and asset manager Natwest is refusing to serve corporate clients who accept cryptocurrencies. The same bank that was founded in 1968 after a merger between Westminster Bank and National Provincial that suffered from intense scrutiny after being involved in the 1987 stock market crash.
The report written by Kalyeena Makortoff, theguardian.com’s bank correspondent, explains that Morten Friis, a Natwest board member and head of the bank’s risk committee, is taking a negative stance on crypto assets. Friis notes that the bank has no need to deal with crypto clients and that digital assets are “high risk” from Natwest’s perspective.
“We don’t feel like dealing with customers, whether we hire them as new customers or have an ongoing relationship with people whose main business is backed by an exchange for cryptocurrencies, or otherwise trade in cryptocurrencies as their main business,” the risk The bank’s manager stressed at a shareholders’ meeting on April 21.
Friis further claimed:
We consider cryptocurrencies to be high risk and therefore we handle them with caution. It is an area where regulation is evolving and we will of course react to that when things change.
A few banks are taking a stand-off approach to crypto assets
Natwest’s current advice echoes the same warning issued by the UK’s Financial Conduct Authority (FCA) in March. The FCA warned that “younger investors are taking big financial risks”. In addition, financial incumbent HSBC has also taken a detached approach to crypto assets. In essence, HSBC has chosen to stop investors from buying shares of companies that own bitcoin. Reports this week also indicate that HSBC is even running into issues with Coinbase (COIN) stocks.
The Natwest bank has not been without controversy, even outside the market routine on Black Monday in 1987. Ten years later, in 1997, corporate and investment banking Natwest Markets announced that the banking group had lost £ 50 million. Further investigation revealed the loss to be more than £ 90.5 million and as a result of this further investigation, confidence in Natwest diminished rapidly. However, the Bank of England (BoE) intervened and curbed the resignation of top Natwest officials.
In 2016, Bitcoin.com News reported that Natwest was one of the first UK high street banks to introduce negative interest rate charging to its customers. Reports at the time showed that only corporate customers would feel the new policy, but the announcement shook the markets and caused confidence to wane as well.
Many crypto asset supporters would say Natwest is a shining example of why bitcoin and its myriad digital assets exist. From the controversies in 1987, 1997, 2016, even today, the bank has witnessed a waning public confidence. More recently, the Financial Conduct Authority (FCA) has filed a criminal case against Natwest for alleged non-compliance with money laundering rules.
What do you think of Natwest explaining that the bank refuses to do business with companies that accept crypto assets? Let us know what you think about this topic in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
Disclaimer: This article is for informational purposes only. It is not a direct offer or invitation to an offer to buy or sell, or a recommendation or endorsement of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.