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Britain’s Nationwide curbs cryptocurrency purchases by customers
Global Banking & Finance Review®
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By Lawrence White and Elizabeth Howcroft
LONDON (Reuters) – Britain’s Nationwide Building Society has restricted customers’ ability to buy cryptocurrencies, the lender said in an email to its members on Thursday.
Nationwide said it will not allow payments to crypto exchanges using credit cards and will limit adult current accounts to 5,000 pounds ($5,995) of purchases per day.
The building society said the move was in response to regulatory concern over the risks of buying digital currencies.
Cryptocurrency prices surged in 2020 and 2021 before sharp declines last year as rising interest rates prompted investors to ditch riskier assets. A series of crypto collapses including the FTX exchange left investors with heavy losses, resulting in calls to regulate the sector.
Nationwide’s announcement follows similar moves by other UK banks. In November, as part of measures to protect customers from scams, Santander introduced limits on the amount customers could transfer to cryptocurrency exchanges and said it would soon block UK customers from sending any real-time payments to cryptocurrency exchanges.
Natwest Group introduced restrictions in 2021.
Nationwide’s website says the bank will continue to restrict payments made to the Binance crypto exchange, citing “similar action from other providers, media coverage and regulatory uncertainty”.
The U.S. Department of Justice is investigating Binance for suspected money laundering and sanctions violations, Reuters has previously reported. Binance has said it regularly works with regulatory agencies to address questions they may have.
($1 = 0.8340 pounds)
(Editing by Sinead Cruise and David Goodman)
Cryptocurrency is a digital or virtual currency that uses cryptography for security. It operates on a technology called blockchain, which ensures transparency and security in transactions.
A crypto exchange is a platform where users can buy, sell, or trade cryptocurrencies. These exchanges facilitate the trading of digital currencies for other assets, such as traditional fiat money.
Risk management in finance involves identifying, assessing, and prioritizing financial risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events.
Regulatory concerns refer to the apprehensions related to compliance with laws and regulations governing financial markets. These concerns often arise from potential risks associated with financial products and services.
A building society is a financial institution owned by its members, primarily focused on providing savings accounts and mortgage loans. They operate similarly to banks but are typically more community-oriented.
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