Bitcoin ban at Nordea has regulator taking backseat

Bloomberg

As Nordea Bank AB blazes a trail in Europe by banning its employees from trading Bitcoin and other cryptocurrencies, the regulator is taking a back seat in a decision-making process it says is better left to the industry.
Sweden’s Financial Supervisory Authority thinks “every institution must decide on the details of their internal regulations specifying the rules for their employees’ investments and trading,” spokesman Peter Svensson told Bloomberg, in response to questions about Bitcoin guidelines.
The hands-off approach may surprise some who associate the Nordic region, and Sweden in particular, with a more activist stance towards regulation. In other parts of the world, authorities are cracking down on Bitcoin and cryptocurrencies like it amid concerns its wild price swings pose a threat to financial stability.
While Nordea’s regulator isn’t stepping in, the bank’s decision to ban Bitcoin trading for its employees may have brought Europe’s finance industry closer to issuing a guideline on the matter.
The European Banking Federation hasn’t yet adopted an official stance on cryptocurrencies, spokesman Raymond Frenken said by phone. But as lenders start imposing their own bans, the organisation may need to come up with one, he said.
“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,” Frenken said.
Nordic central banks have been explicit in their characterisations of Bitcoin.
Lars Rohde, the governor of the Danish central bank, says it’s dangerous. Stefan Ingves, the governor of Sweden’s Riksbank, told lawmakers on Tuesday he doesn’t think Bitcoin can even be considered a currency. Instead, he referred to it as a “speculative virtual asset whose value has no guarantee.” Financial supervisors are grappling with how to regulate cryptocurrencies, as Bitcoin’s recent plunge underscores concerns that its volatility can wipe out retail investors. South Korea may ban cryptocurrency exchanges altogether. The European Securities and Markets Authority says it’s monitoring the situation.
Nordea will impose its ban from Feb. 28, after its board agreed to take a stand due to the “unregulated nature” of the market, spokeswoman Afroditi Kellberg said by phone. The bank had about 31,500 employees at the end of the third quarter.
“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,” Kellberg said. “Nordea therefore, like all banks, has the right to set out policies in this area that apply to its staff.”
Nordea said its policy “includes transitional provisions for staff with existing holdings and allows for certain exceptions.” Employees who already own Bitcoin are “permitted to keep existing holdings.”
Other Nordic lenders are also formulating a position on the matter. Danske Bank A/S, Denmark’s biggest financial group, said it discourages employees from trading Bitcoin but has yet to decide whether a full ban is required.