Many banks have taken measures against crypto trading, affecting the blockchain market.
HSBC does not process crypto payments. Its customers are not allowed to bank money from digital wallets. In addition, clients cannot invest in shares in companies involved in crypto. In the same vein, NatWest does not do business with people who transact with digital assets.
Some banks, like the Lloyds bank, have even shut down accounts involved in crypto trading. As a result, many investors had to scramble to save their finances. Blockchain technology experts discuss the reasons behind these strict regulations and drastic measures.
Why Are Some Banks Against Crypto Trade?
Blockchain technology has been disrupting the financial industry. And it has the potential to replace traditional banking. Blockchain can:
- Simplify payments
- Enhance clearance and settlement systems
- Remove the need for gatekeepers in credits and loans
- Prevent fraud by storing customer information in secure systems
- Tokenise traditional securities
- Create plenty of great fundraising platforms
- Improve trust and transparency among trade parties
So it is no wonder many financial agencies worldwide are against cryptocurrency. Some respond with crackdowns and strict regulations, while others outright ban crypto trading. In some countries, financial leaders take a hard stance against cryptocurrency.
For instance, Bank of England governor Andrew Bailey took a swipe at investors in recent cryptocurrency news. He declared that cryptocurrency has no intrinsic value. Moreover, Bailey warned that people should only invest in them if they are prepared to lose all their money.
Many Banks Are Cracking Down on Crypto Trading Worldwide
The UK is not the only country with banks that are cautious about crypto, and people looking to invest in digital assets must be aware of which banks to be careful of.
India does not ban crypto trading. But the Reserve Bank of India, the country’s central bank, has taken to asking banks to cut ties with digital assets. In addition, Local banks asked the National Payments Corporation of India (NPCI) to block crypto transactions.
China is also cracking down on crypto trading and digital asset management. Regulators overseeing the financial sector prohibited banks from offering crypto-related services. Their ruling reiterated a 2017 ban. The ban stopped banks from accepting or using digital currencies for payments and settlements.
But Not All Banks Are Against Crypto
Morgan Stanley approved Bitcoin exposure for several mutual funds in early April. In the same month, Wall Street titan Goldman Sachs started allowing their clients to invest in cryptocurrencies. Experts predict that this is only the start of banks taking up digital assets.
Meanwhile, NYDIG stated that clients of some American banks will soon be able to buy, sell, and keep Bitcoin. After all, many banks are considering crypto because they can see many clients investing in exchanges.
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