Source: Danske Bank
We have a negative position towards cryptocurrencies and strongly recommend that our customers refrain from investing in the field.
Over the past years, cryptocurrencies such as Bitcoin, Ethereum and Monero have gained widespread attention among consumers and investors in many countries.
The debate about these digital currencies has given rise to questions from both customers and investors. With this article, Danske Bank would like to express our view on cryptocurrencies.
Avoid investing in cryptocurrencies
Overall, we are negative towards cryptocurrencies and we strongly recommend that our customers avoid investing in cryptocurrencies.
First of all, cryptocurrencies differ from traditional currencies in the sense that they are not backed by a central bank. They lack the investor and consumer protection typically connected with traditional currencies and investments.
Secondly, cryptocurrencies have turned out to be highly volatile, and the price formation is non-transparent. As an investor, you have very limited insight to how the market is developing and what is driving the price.
Thirdly, and most importantly, the lack of transparency and regulatory control have made cryptocurrencies a target for criminal purposes and we know that they on several occasions have been involved in criminal transactions like money laundering or extortion.
As a financial institution, we have an obligation to assist in the fight against financial crime and money laundering. At the current stage, cryptocurrencies do not offer the sufficient level of transparency in order for us to live up to our obligations within anti money laundering regulation.
For these reasons, it is not possible to trade cryptocurrencies on our trading platforms. However, we monitor the market closely, and if the cryptocurrency market becomes more transparent and mature, we might reconsider this position.
Crypto-related instruments phased out
Due to the above mentioned reasons, we do not in any way want to support the investment environment surrounding cryptocurrencies. That is why, we have decided to also phase out the possibility to buy financial instruments directly related to the price of cryptocurrencies. For instance, that could be derivatives or ETNs (Exchange Traded Notes) that mirror the price of a cryptocurrency. These types of securities are characterised by high volatility and risk.
Credit card transactions and deposits related to cryptocurrencies
If you as a customer wish to deposit funds originating from cryptocurrency investments, we will treat it in the same way as deposit funds stemming from other types of investments. Accordingly, we may accept the deposit, if it complies with current regulation and anti-money laundering procedures.
Furthermore, we do not block the usage of a Danske Bank issued credit card in connection with trading cryptocurrencies. However, as with all credit card transactions, customers should comply with current anti-money laundering procedures and regulation.