It is no surprise that banks are starting to feel threatened by cryptocurrencies. Most think that cryptocurrenices will end most banks, because with crypto there is no need for any or most banks.

Danske Bank, based in Copenhagen, Denmark, has advised customers against investing in cryptocurrencies, the company announced on its website. The bank, which has branches in Trondheim, Norway, and Vilnius, Lithuania, does not presently permit cryptocurrency transactions on its website.

Cryptocurrencies are not backed by a central bank; hence, the bank claims they lack the investor and consumer protection typically connected with traditional currencies and investments.

Secondly, cryptocurrencies have been highly volatile, and the price formation is non-transparent, the notice stated. Because of this, investors have very limited insight into how the market is developing and what factors drive the price.

Most Important: Lack Of Transparency

The bank cites the lack of transparency and regulatory control as the most important reasons for not investing in cryptocurrencies. These factors have made cryptocurrencies a target for criminal purposes such as money laundering and extortion.

Danske Bank claims a financial institution has an obligation to assist in the fight against money laundering and other financial crimes.

Cryptocurrencies at present do not provide a sufficient level of transparency for the bank to meet anti-money laundering (AML) obligations, the notice stated.

An excerpt read:

For these reasons, it is not possible to trade cryptocurrencies on the bank’s trading platforms. However, the bank does monitor the market closely, and if the cryptocurrency market becomes more transparent and mature, the bank might reconsider this position.

“We do not in any way want to support the investment environment surrounding cryptocurrencies,” the notice added. It has phased out the possibility of purchasing financial instruments directly related to the prices of cryptocurrencies.

We will have to wait and see if consumers will respond to this, or how most will respond at all. What we are seeing here in my opinion is banks trying to eliminate their competition any way they can. By blocking something that is completely legal.