Danske Bank has just released an official post about its stance on cryptocurrencies.
The Danish bank started off by acknowledging the significant digital innovation that cryptocurrencies bring to financial services, as well as the growing global market for cryptocurrencies.
Despite the acknowledgements above, the bank maintains a cautious approach towards cryptocurrencies for the following reasons :-
- Trade in cryptocurrencies is not always transparent enough: The bank stated that this makes financial crime and money laundering more challenging to fight.
- Trade in cryptocurrencies only partially regulated by financial regulation: The bank stated that consumers may not always get the consumer protection associated with regulated financial products.
- Crypto pricing is opaque and highly volatile: The bank stated that the investor might have limited insight into the market development and the driving force behind the price.
- Transactions with some cryptocurrencies are highly energy intensive: The bank stated that this clashes against their policy for sustainable development.
It is for these reasons that crypto asset trading is not possible on Danske Bank’s trading platform for the time being. The bank added that they are currently unable to offer investment advice on crypto assets.
However, this does not mean that the bank is outright against cryptocurrencies. The banking group will be supporting the development of crypto regulations under the new EU legislation, Regulation of Markets in Crypto Assets (MiCA).
Clients of Danske are still allowed to use credit cards for crypto trading, as long as they comply with the relevant anti-money laundering rules and laws. Clients can also deposit their funds that stem from crypto investments, similarly to funds from other types of investments.
Danske Bank will be keeping a close eye on the development surrounding cryptocurrencies. They will rethink their stance once the crypto market reaches a certain point of maturity and is further regulated.