NatWest will refuse to serve business customers who accept payment in cryptocurrencies such as bitcoin, which the UK lender has categorised as “high risk”.
Morten Friis, a NatWest board member and head of its risk committee, said the bank was taking a “cautious approach” to cryptocurrencies, and would closely monitor any change in tone from the UK regulator, which has warned that consumers stand to lose all their cash by investing in crypto assets.
“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 during an online shareholder event on Wednesday.
“We think of cryptocurrencies as high risk and we’re taking, for that reason, a cautious approach to this. It’s an area where regulation is very much in evolution and we’ll obviously respond to that as things change,” he added.
NatWest’s position could mean turning away major clients who have recently announced plans to accept cryptocurrency payments alongside those made by debit, credit cards and cash. Notable companies with such plans include ethical cosmetics firm Lush, office sharing firm WeWork, and electric car giant Tesla.
It pits the lender against other major banks like JP Morgan. The US bank’s chief executive, Jamie Dimon, once called bitcoin a “fraud” that was only fit for use by drug dealers, murderers and people living in places such as North Korea. However, more recently he said that some “very smart people” were getting involved in the cryptocurrency, which has surged in value and jumped 93% since the start of the year to $56,000 each.
Earlier this week the chancellor, Rishi Sunak, announced a top-level taskforce to explore the benefits and risks of a Bank of England digital currency for the UK – which has been dubbed Britcoin.
However, the Financial Conduct Authority issued a warning to would-be investors in January, saying consumers should be prepared to lose all their money if they invest in schemes promising high returns from digital currencies like bitcoin. Cryptocurrency investments are not covered by UK schemes that help investors reclaim cash when companies go bust.
Friis said Natwest would have to conduct extra financial crime checks for any personal customers who wanted to dabble in cryptocurrencies, which have previously been linked to money laundering and black market dealings.
“We expect to continue to take a cautious approach, but we’ll watch how the market evolves,” he said.
NatWest will refuse to serve business customers who accept Bitcoin and other cryptocurrencies