The biggest Nordic bank has told its employees not to trade bitcoin and other cryptocurrencies, in a move that may lead the European Banking Federation to review its official stance on the products.
Nordea Bank AB will impose the ban from Feb. 28, after the board agreed to take a stand due to the “unregulated nature” of the market, spokeswoman Afroditi Kellberg said by phone. The bank had about 31,500 employees at the end of the third quarter.
Nordea said its policy “includes transitional provisions for staff with existing holdings and allows for certain exceptions,” according to an email sent to Bloomberg. Employees who already own bitcoin are “permitted to keep existing holdings.”
The second-biggest Nordic bank, Danske Bank, said it discourages employees from trading bitcoin but has yet to decide whether a full ban is required. “We’re skeptical toward cryptocurrencies and are advising our employees not to trade them, but we don’t impose an actual ban,” Danske spokesman Kenni Leth said in an email. “We’re currently analyzing the situation, and time will tell whether there’ll be a formal ban.”
Danske isn’t offering its clients trading in bitcoin or products like it. “Due to lack of maturity and transparency in the various cryptocurrencies, we have decided not to provide trading of such securities on our various investment platforms,” Leth said.
Nordea said its treatment of bitcoin with regard to clients isn’t a policy as such, “but it’s important to emphasize that it is not something we recommend our customers to invest in,” the bank said in an email. “Just like every other bank trading platforms, Nordea Investor provides access to trade all securities listed on, for example, Nasdaq.”
In practice, this means that Nordea’s “self-services customers can purchase cryptocurrency-related products through the platform, but it is important to emphasize that it is not something we recommend.”
Nordea Chief Executive Officer Casper von Koskull voiced his skepticism toward cryptocurrencies back in December. In an interview in Stockholm, the CEO called bitcoin an “absurd” construction that defied logic. He also said “there’s a lot of evidence that bitcoin is basically being used for financial crime.”
The European Banking Federation hasn’t adopted an official stance on cryptocurrencies, spokesman Raymond Frenken said by phone. But as lenders start imposing their own bans, the organization may need to come up with a clear position, he said. “If banks like Nordea are going to have a very specific policy on this — and we’re hearing regulators are taking a look at this, including the ECB and central banks — probably it will be that it’s changing. With developments like this, it’s more likely that it will have to be discussed in the context of the European Banking Federation,” Frenken said.
Nordea cited a lack of rules protecting investors, and listed risks ranging from volatility to liquidity and financial crime. “Given these high risks, and in line with our role in the banking industry to maintain high standards of conduct, Nordea is not supportive of staff investing in cryptocurrencies,” the bank said.
Frenken at the EBF said that as far as he knew, Nordea is the first major European bank to impose such a ban. “I haven’t heard of any other bank banning bitcoin,” he said. “This could very well be a first.”