Santander is another large bank to place restrictions on customer interaction using cryptocurrencies.
Customers at high risk
Santander has made it clear on its website that it will limit customers’ ability to use their accounts to purchase cryptocurrencies. According to the bank, crypto is “highly risk” and there is an increase of cryptocurrency fraud in the UK. There is also no protection for customers if something goes wrong.
Santander’s message to customers includes a link to the Financial Conduct Authority website. It also contains an article from January 2021 in which the FCA warned UK consumers against investing in crypto assets promising high returns.
The following statement is part of the Santender message to customers:
“We want to protect our customers, and we believe that limiting payments made to cryptocurrency exchanges is a good way to ensure your money stays safe.”
The message also states that crypto wallets are unlikely to be protected by either the Financial Ombudsman Service, or the Financial Services Compensation Scheme in the event of an emergency.
The message continues to state that customers can only spend PS1000 per transaction on cryptocurrency payments, and that a limit of PS3,000 will apply to any rolling 30-day period.
The bank also stated that it will make more changes to “prevent” and “limit” payments to cryptocurrency exchanges in the future. The bank doesn’t specify when these changes will take place, but it does state that customers will be informed prior to them.
The message concludes by stating that the bank will continue to block any payments to Binance. It cites the FCA warning to consumers about this particular crypto exchange.
Opinion
The times have changed. Now your bank can declare with absolute authority and to little opposition who all its customers can send their money to.
This is not a new practice. Other banks in the UK have also imposed similar sanctions on customers who engage in crypto transactions. HSBC, for example, has banned crypto transactions from customer accounts since January 2021. However, strangely, the bank recently announced a partnership to crypto metaverse project The Sandbox.
Is it too strong a statement to say “how dare they!” We are only the bank customers. But can banks be allowed to decide with whom you can transact?
If a client decides to take on a higher risk in cryptocurrency or any other investment, the bank should not be involved.
One could argue that banks don’t like the crypto sector’s competition. But, preventing clients from transacting in crypto is too extreme.
Banks should be the custodians and not the arbiters for what their customers do with their money. Isn’t that how banking started?
Banks are currently facing obsolescence. They are not welcome at all with the imminent arrival of central bank digital currency (CBDCs). Their only hope is to embrace crypto and offer services. Santander, take note.
Disclaimer: This article is intended for informational purposes only. This article is not intended to be used for legal, tax, investment or financial advice.
