US-based banks are taking steps towards allowing their institutional consumers to receive bitcoin exposure; a UK banking institution will cease servicing all crypto-based businesses. A UK-based bank, NatWest, will stop serving consumers who accept payments in bitcoin and other cryptos. The institution attributed to current warnings emphasized by the nation’s financial regulator and advocated that handling digital assets includes high risk.
As per The Guardian coverage, National Westminster Bank, identified as NatWest, intends to stop serving all consumers taking crypto payments. The bank’s head of risk committee and board member, Morten Friis, characterized the institution’s progress as taking a careful step towards the crypto ecosystem. The board member described “high risks” connected with cryptocurrencies and the absence of clear regulations as the fundamental reasons for the bank’s withdrawal.
NatWest’s decision occurs in a compelling time, and it conflicts with the predominant approach undertaken by banks over the ocean. US-based banks, managed by BNY Mellon, JPMorgan Chase & Co, Morgan Stanley, and even Goldman Sachs, have been prominently more exposed to the concept of dispensing with digital assets. However, some even went further and allowed direct access to cryptos for their institutional clients.
NatWest to Observe Regulatory Evolution of Crypto in the UK via FCA
Moreover, Frii’s opinions have similar sentiments attributed to another UK bank HSBC, that employed identical statements in declaring its decision to prohibit consumers from acquiring MicroStrategy Stock. HSBC’s anti-crypto stance also viewed the bank decline to enable account holders to transfer profits from cryptocurrency exchanges earlier in the year. As per Friis, the bank’s declaration comes due to the requirement to continue carefully with cryptos, provided the industry’s evolving nature of the industry’s regulatory system. The NatWest board member stated that it would monitor the development of cryptocurrency regulations from the UK’s FCA (Financial Conduct Authority).
NatWest’s unwillingness to function with crypto businesses and consumers linked with the industry comes after UK’s FCA issued a list of possible risks connected to digital assets. In early 2021, the FCA cautioned investors regarding the highly volatile nature of crypto assets. The regulator elucidated that people allotting funds in the industry should be ready to lose all their money. The FCA was incredibly expressive against dark projects with connections to the crypto space that encourage particularly high returns if users finance via them. Further, the regulator outlawed the sale, marketing, and distribution of crypto derivatives and ETNs (exchange-traded notes) for all consumers as of January this year.