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Danske Bank clarifies it won’t support crypto investments for now, but ‘will review’ its position later

Danske Bank clarifies it won't support crypto investments for now, but 'will review' its position later
Jordan
Major
1 month ago
3 mins read

In a post published on June 18, Danske Bank expressed its view on the cryptocurrency market. One of the largest European banks recognizes the widespread interest in cryptocurrencies and believes that blockchain technology offers tremendous promise.

According to the Denmark-based bank’s statement, digital assets are a key digital innovation in financial services. In recent years, cryptocurrencies like Bitcoin and Ethereum have sparked plenty of interest from investors and the media, and the bank confirms that it gets many inquiries about them from customers, journalists, and stakeholders.

Financial crime concerns

Danske Bank suggests that the cryptocurrency market is not always transparent, making it harder for the financial institution to meet its duties to combat financial crime and money laundering.

Moreover, because cryptocurrency trading is only partially controlled by financial regulation, customers may not necessarily enjoy the consumer protection associated with regulated financial products.

The financial body considers cryptocurrency pricing opaque and highly volatile, making it difficult for investors to understand how the market develops and what drives it.

In addition, transactions involving some cryptocurrencies need huge quantities of computer power that are incredibly energy-consuming, which is incompatible with Danske Bank’s goal of promoting sustainable growth in conjunction with their clients.

Danske can’t offer crypto investment advice

Trading cryptos or financial products based on digital assets is presently unavailable on Danske Bank’s trading platforms. As a result, the banks advise against investing in such financial instruments. Likewise, at this time, the private bank cannot give investment advice on cryptocurrencies.

Danske supports developments under the new EU law Regulation of Markets in Crypto Assets (MiCA), which they expect to improve market regulation for cryptocurrencies and other forms of crypto-assets such as stablecoins.

Credit card transactions and deposits derived from cryptocurrency investments will be reviewed in the same manner as deposits originating from other types of investments. As a consequence, it may accept the deposit if they comply with relevant regulations and anti-money laundering procedures.

Crypto purchases accepted on Danske card 

In addition, Danske has confirmed that they do not prohibit using a Danske Bank credit card in conjunction with cryptocurrency trading.

Customers must follow appropriate anti-money laundering processes and adhere to applicable regulations, just as they do with all other credit card transactions.

It appears the institution is constantly monitoring developments in the field of cryptocurrencies, and as the market develops and becomes more regulated, it will reevaluate its position in the space.

It is worth mentioning, that in 2020, the Danish State Prosecutor for Serious Economic and International Crime (SØIK) has fined Danske Bank nine million Danish kroner (US$1.4 million) for misleading investors and this way violating the country’s Executive Order on Investor Protection.

To see more statistics on global banks’ violations check our Bank Fines 2020 report.

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Jordan Major
Author

Jordan is an investor and market analyst. He's passionate about stocks, ETFs, blockchain, and digital assets. At Finbold.com, he delves into the technicalities to obtain future trends for new market traders and gives insights into user-friendly platforms for beginners.