In the last few months, cryptocurrency has reached new levels of acceptance both by the general public and by the larger business world. Firms like Tesla and WeWork now accept Bitcoin as a form of payment for products and services, and Time Magazine now takes cryptocurrency for the payment of subscriptions.
However, it seems these businesses of this nature might not be welcomed at NatWest. This is because the bank recently announced that it will not offer services to businesses that take cryptocurrency as a form of payment. The bank also now categorizes Crypto as “high risk”.
Taking a “cautious approach” to cryptocurrencies
This information from the UK bank was made public by Morten Friis, a NatWest board member and head of its risk committee, who explained that the bank is trying to take a cautious approach to cryptocurrency.
Despite this, there are plans to monitor any public statement or action taken by the UK financial regulator. The regulator has previously warned the public about investing in cryptocurrency assets, stating that there is a risk of investors losing all their money.
In light of the recent development, the bank will not be offering services to firms that deal very closely with cryptocurrency.
“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,” Friis said.
This move is an interesting one considering a lot of the corporate world is moving towards being more friendly to the cryptocurrency space as opposed to shunning it. The number of firms that are beginning to accept cryptocurrency as a form of payment will likely spark a ripple effect. This means, essentially, that banks like NatWest that are turning away crypto-backed businesses could lose out on significant profits in the future.
At the same time, this decision seems to be informed by the attitude that the UK financial regulator has towards cryptocurrency. Should regulators become more accepting of cryptocurrency, this position might change in the future.
“We expect to continue to take a cautious approach, but we’ll watch how the market evolves,” Friis noted.
Hopefully, the attitude of the regulators in the UK towards cryptocurrency improves and banks like NatWest are able to fully embrace crypto.