Nordea Bank's leadership in Stockholm announced this week that its 31,000 staff members across Europe can no longer trade bitcoin or other major digital currencies. The bank regards cryptocurrencies a
Nordea Bank's leadership in Stockholm announced this week that its 31,000 staff members across Europe can no longer trade bitcoin or other major digital currencies. The bank regards cryptocurrencies as "high risk" and is concerned about exposure to financial loss for both its workers and the institution.
"The risks are seen as too high and the protection is insufficient for both the co-workers and the bank," Nordea told Reuters in a statement about the policy.
Afroditi Kellberg, a spokeswoman for Nordea, defended the measure by referencing standard banking practices. She said: "It is widespread practice across the banking industry to restrict the personal account dealing of staff to prevent them taking positions in speculative investments, or which might expose them to a risk of financial loss and therefore impact their financial standing. Nordea therefore, like all banks, has the right to set out policies in this area that apply to its staff."
Danske Bank, Denmark's largest lender, took a softer stance on the matter. The institution discouraged employees from trading bitcoin but stopped short of imposing an outright ban.
CEO Casper von Koskull's skepticism toward cryptocurrency is driving Nordea's hard line on the issue. According to Bloomberg, von Koskull said bitcoin "defied logic" and expressed concern that the currency facilitates criminal transactions. But this reasoning is flawed.
Banks across the financial sector permit their employees to buy and sell stocks, even though investors have lost billions in equities over time. Institutions should not impose their own risk assessments onto their workforce. Each trader must evaluate risk within their own context.
Every asset carries risk. Stocks, bonds, currencies, and commodities all involve potential loss. Governments do not prohibit workers from stock market participation despite substantial losses. The cryptocurrency market has matured. Exchanges now enforce Know Your Customer and Anti-Money Laundering compliance. Daily trading volume in digital currencies reaches $29 billion. Major cryptocurrencies trade with more liquidity than Apple, the world's most liquid stock.
The argument about criminal finance requires closer examination. Cash finances more than 90 percent of all reported financial crime, not digital currencies. Bitcoin also lacks the anonymity that criminals would demand for their activities. All bitcoin transactions are recorded on a public ledger, which makes it unsuitable for money laundering schemes. Drug trafficking, money laundering, and other crimes are funded with fiat money, not blockchain networks.
Nordea's decision reflects its chief executive's skepticism. But the reasoning behind it does not hold. Bitcoin's transparent nature makes it a poor vehicle for the crimes that von Koskull cited when defending the ban.
