According to a Guardian report, the bank’s head of risk Morten Friis told investors at an online event on Wednesday that NatWest has “no appetite” for dealing with customers whose main business is backed by the exchange of crypto.
“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”, Friis said.
NatWest’s move will potentially position it against the prevailing trend in the finance sector, which is increasingly seen as warming up to crypto and the idea of digital currencies in recent months.
The decision also means the bank could potentially need to turn away major firms such as electric car maker Tesla Inc (NASDAQ:TSLA), office space firm WeWork and cosmetics firm Lush, all of which have drawn up plans to accept crypto as payment for goods and services.
The UK government has also got in on the act, with Chancellor of the Exchequer Rishi Sunak announcing the creation of a joint task force between the Treasury and the Bank of England to explore the potential of a central bank digital currency (CBDC), nicknamed ‘Britcoin’.
However, regulators are still warning investors to be cautious of investing in the crypto markets, with the Financial Conduct Authority saying in January that crypto investors are “unlikely to have access” to various protection bodies such as the Financial Ombudsman Service or the Financial Services Compensation Scheme, which protects customer’s monetary deposits if a financial services firm fails.
Shares in NatWest were down 0.5% at 191.8p in early deals on Thursday.