National Westminster Bank (NatWest), a major retail and commercial bank in the U.K., will stop serving any businesses that accept or otherwise transact cryptocurrencies, news daily The Guardian reported yesterday.
“We have no appetite for dealing with customers, whether taking them on as new clients or having an ongoing relationship with people, whose main business is backed by an exchange for cryptocurrencies or otherwise transacting in cryptocurrencies as their main activity,” Morten Friis, the bank’s head of its risk committee, said during a shareholder event.
Per the report, Friis noted that NatWest ultimately considers digital assets as “high risk” and therefore plans to take a “cautious approach” to them. The bank will also monitor all developments in the field of regulations and will “obviously respond to that as things change.”
A regulatory gray zone
As CryptoSlate previously reported, there is indeed some level of regulatory uncertainty in the U.K. when it comes to cryptocurrencies. In January, for example, the Financial Conduct Authority (FCA) similarly warned the general public about “high risks” associated with digital assets and even advised that consumers “should be prepared to lose all their money” when dealing in crypto.
“The FCA is aware that some firms are offering investments in cryptoassets, or lending or investments linked to cryptoassets, that promise high returns. If consumers invest in these types of products, they should be prepared to lose all their money,” the FCA stated in a note at the time.
In this light, it is unsurprising that a major bank such as NatWest would want to insulate itself from any potential risks until the regulators provide clearer guidelines. Especially since crypto investments don’t fall under any customer protection schemes in the U.K., which means that customers have no recourse in case of losses.
If @NatWestGroup had not refused @coinbase in 2017-18 it’s share price would be 3x today #crypto https://t.co/zD5xx2vHSJ
— Ajit Tripathi (@chainyoda) April 22, 2021
At the same time, well-known companies such as Lush, WeWork, and Tesla have recently announced (or already implemented) their plans to add crypto payment options alongside traditional ones.
According to Friis, NatWest also plans to conduct extra financial crime checks for any personal customers who want to get involved with cryptocurrencies.
“We expect to continue to take a cautious approach, but we’ll watch how the market evolves,” he concluded.
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