Nordea Bank, one of the most reputed financial institute in Northern Europe, has banned all its 31,000 employees from owning bitcoin and other cryptocurrencies. The giant Northern European Bank did not stop there and is also restricting its employees from learning about the crypto space. The new policy was enacted due to the “unregulated nature” of the crypto market.
Bitcoin Investments are too Risky, says Nordea
The newly imposed policy has forbidden its employees from owning cryptocurrencies due to its near speculative nature, thus making it a risky investment. The Nordic Bank stated, “Given these high risks, and in line with our role in the banking industry to maintain high standards of conduct, Nordea is not supportive of staff investing in cryptocurrencies.”
Nordea spokeswoman informed Reuters that the new legislation will come into effect starting February 28, 2018. She also added that the bank would not influence or force any employees, those who already own it, to sell their crypto holdings. In an email to Reuters, she wrote, “The risks are seen as too high, and the protection is insufficient for both the co-workers and the bank.”
In the past, Nordea bank officials have publicly criticized bitcoin. In December 2017, Nordea Bank President and CEO Casper von Koskull explained,
“If you somehow allow that to live without controls, then, given the billions we spend on financial regulation as a financial system, I mean, I think it’s actually a joke that you then just let something like bitcoin live. I don’t get it – it’s absurd.”
Sweden’s Financial Regulatory won’t Interfere
Sweden’s Financial Regulator has also backed the new legislation passed by the bank. Peter Svensson, a spokesman of the Financial Supervisory Authority, told Bloomberg, “Every institution must decide on the details of their internal regulations specifying the rules for their employees’ investments and trading.”
The decision from Nordea brings Europe closer to a regulatory framework for cryptocurrencies. As of now the European Banking Federation does not have an official stance on cryptocurrencies.
Raymond Frenken, a European Banking Federation spokesperson, explained that:
“If banks like Nordea are going to have a very specific policy on this — and we’re hearing regulators are taking a look at this, including the ECB and central banks — probably it will be that it’s changing. With developments like this, it’s more likely that it will have to be discussed in the context of the European Banking Federation.”
Trade Unions Investigating the Ban
Many crypto proponents took to social media by calling the Nordea’s move unethical. The trade unions Finansforbundet, a Danish Association of Lawyers and Economists that arranges a large percentage of Nordea (Denmark) employees, will investigate the ban.
Chairman of the Finance Federation, Kent Petersen, said,“We are in principle boundary for what an employer can intervene, and we will, of course, investigate further.”
Petersen, also points that Denmark is a country where every individual has the freedom to invest his money wherever he/she likes. In this light, the new policy from Nordea could be considered as a legal offense against the employees.
Nordea spokeswomen Afroditi Kellberg countered by stating that:
“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.”
Bitcoin Ban will Harm Nordea on a Longer Run
Interestingly another cryptocurrency proponent Christoffer de Geer, wrote on Medium, that banning employees from owning cryptocurrencies and adapting the technology could only harm the Nordea Bank over a long run. De Geer explained that banks have ruled the financial market as they wished for years but with bitcoin now in the picture, these financial institutions are worried they could be run out of business.
Also, he mentioned that to adopt the revolutionary blockchain technology one must use cryptocurrencies which Nordea employees won’t be able to. To end the Medium author says:
“Nordea will be the last bank in Finland to understand that the world is changing.”
Will Nordea Bank add some provisions for its employees to own Bitcoin? If not, will the bank face legal actions?