Nordic Banks Express Hostility to Cryptocurrency

Two of Scandinavia’s largest banks have expressed their concern over Bitcoin and other digital currencies. According to a memo sent on Monday, Nordea will no longer allow its employees to trade cryptocurrency.

The ban was confirmed by a phone call received by news outlet Bloomberg which also set a date for the new regulation coming into effect – February 28. Afroditi Kellburg, a spokesperson at the bank cites the “unregulated nature” of the digital currency market as reasoning behind the decision. Additional concerns were the lack of protective measures in place to support investors in the space and the lack of transparency some cryptos have. Finally, Kellburg also highlighted issues with volatility and liquidity to the news source.

Employees exempt

The policy from Nordea will include some “transitional provision for staff with existing holdings” and will allow “for certain exceptions”. This means that any of the 31,500 current employees at the financial institution will be able to keep their existing crypto holdings.

Meanwhile, another Scandinavian bank has also expressed skepticism about the cryptocurrency market. Danske Bank A/S is the second largest Nordic bank. They too are discouraging employees from trading digital currencies. However, they are yet to make a decision on whether a similar blanket ban is required. Danske spokesperson Kenni Leth told the news source via email:

“We’re sceptical toward cryptocurrencies and are advising our employees not to trade them, but we don’t impose an actual ban… We’re currently analysing the situation and time will tell whether there’ll be a formal ban.”

Neither of the aforementioned Nordic banks currently offer any products for their clients to get involved with the cryptocurrency space. In the same email, Leth from Danske Bank stated:

“Due to lack of maturity and transparency in the various cryptocurrencies, we have decided not to provide trading of such securities on our various investment platforms.”

Today’s sentiment coming from the two banking institutions is in line with that expressed by Nordea’s Chief Executive Office Casper von Koskull. In an interview from last December, he called Bitcoin an “absurd” construction alleging that it completely defied logic. He went on to highlight an oft-repeated criticism of cryptocurrency, that it’s used to conduct financial crimes.

Banks hesitant

Meanwhile the European Banking Federation have yet to impose any regulation surrounding Bitcoin. However, a spokesperson for them, Raymond Frenken, has also weighed on the topic of banks banning investment in cryptocurrency. Bloomberg report:

“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.”

The EBF spokesperson concluded by stating that this was the first they’d heard of a bank banning Bitcoin investments. “This could very well be a first”.


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In a lengthy document to their highest profile clients, the Goldman Sachs Private Wealth Management division has warned about the danger of investing in cryptocurrency. For the banking giant, the rise in Bitcoin and other digital currencies during 2017 is a sure signal that the entire space is in an economic bubble.

Typically for crypto naysayers, during the 108 page document the authors mention the Dutch “Tulipmania” of the seventh century, as well as the “dot-com” bubble of the turn of this century. However, they also go on to highlight the surge in the price of the stocks of firms loosely associating themselves with the cryptocurrency space:

“The mania surrounding cryptocurrencies is probably even better illustrated by the price surges seen in companies that announce some type of affiliation with blockchain technology or cryptocurrencies.”

Stock bubble

For Goldman Sachs, recent examples like Long Blockchain (LBCC) (formerly Long Island Ice Tea Group) and the Crypto Company (previously a sports bra company) seeing the value of their shares increase by a percentage of five figures is clear evidence of an economic bubble.

During the document, Sharmin Mossavar-Rahmani and Brett Nelson (both senior officials at the Investment Strategy Group Goldman Sachs) do acknowledge some practical uses for the rapidly growing technology behind cryptocurrency. Again, they reiterated the enthusiasm for blockchain common amongst most central bankers of the world. However, for them Bitcoin does not provide enough of the advantages that other digital currencies could potentially deliver. They write:

“We think the concept of a digital currency that leverages blockchain technology is viable given the benefits it could provide: ease of execution globally, lower transaction costs, reduction of corruption since all transactions could be traced, safety of ownership, and so on. But bitcoin does not provide any of these key advantages. Quite the contrary. Not only is there no ease of execution, but settlement often takes as many as 10 days. In late 2017, the price discrepancies among 17 US exchanges for one bitcoin amounted to $4,156, or about a 31% difference between the high and low prices. Transaction costs have skyrocketed, and frequent hacking has wiped out entire wallets and exchanges of their bitcoin holdings.”

The pair go on to highlight their scepticism that Bitcoin and other cryptos will maintain their current value in the long run. They’re also doubtful that cryptocurrency will replace the dollar as a global reserve currency.

Unsteady as she goes

The document, titled “(Un) Steady as She Goes” does not focus purely on Bitcoin, however. It serves as a round up of the various events happening in the previous 12 months that have affected the value of the dollar. It was sent exclusively to Goldman’s wealthiest clients. To be considered worthy of membership of the firm’s Private Wealth Management division, clients must have at least $10 million in assets that are available for investment purposes.


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Companies and their investors who have jumped on the cryptocurrency and blockchain bandwagon are discovering the other side of aligning their image to digital currency. During the bullish 2017 market, firms who announced support for Bitcoin, or included blockchain in their branding or business models, experienced sharp rises in their stock price. However, following the news that a crypto clampdown might be soon underway in Asia, the fear and uncertainty surrounding the markets of Bitcoin and its close cousins has spread to traditional stocks associated with the emerging asset class.

Payment processing company Square integrated Bitcoin buying and selling functionality to their app late last year. Following the news, the price of their shares immediately shot up. However on Tuesday, as the price of Bitcoin plummeted to around $10,000, Twitter CEO Jack Dorsey’s company also lost $90 million in market value. Square ended regular trading with a valuation of $15.1 billion. This equates to a loss of around 5%.

Meanwhile, e-commerce company Overstock suffered a similar fate. They’ve been long time proponents of cryptocurrencies and were one of the earliest big names to allow their customers to pay in them. Following the sizeable correction experienced this week, the price of their stock fell 11%. They ended the trading day with a loss of around $200 million. This put their market capitalisation at $1.8 billion.

However, it’s not just these larger names that have been affected by the downturn in the price of cryptocurrencies. Examples like Riot Blockchain (formerly Bioptix), a once-biotech company who recently moved into the crypto space lost 17% of their market cap. Meanwhile Eastman Kodak, the camera manufacturing giant, recently announced that they would offer their own cryptocurrency known as Kodakcoin. The news sent their stock price soaring 60% on the day it was announced. However, yesterday they too suffered 8% losses.

Typically, the South Korean and Chinese cryptocurrency markets have been some of the planet’s largest. It’s therefore not surprising that fear of government hostility towards digital currencies there would create such a downturn across almost all blockchain-based coins. No doubt that cryptocurrency naysayers around the globe will be busy penning yet more Bitcoin obituaries to add to the ever-growing list of times that Bitcoin “died”.

Soldiers in South Korea will no longer be able to access online cryptocurrency trading websites whilst at military bases. A notification issued Monday by the Ministry of Defence outlined plans to crackdown on digital currency trading. They also began shutting down access to websites about Bitcoin and other virtual currencies at the same time. The notification read:

“According to internal rules, we will gradually shut down internet access to websites on encrypted currency starting Monday.”

The measure is in line with other prohibited material on military bases. This includes pornography and online gambling websites. The Korea Times report that a further crackdown on soldiers using cryptocurrency might be incoming. According to a ministry official:

“We are going to announce specific countermeasures for cryptocurrency transactions made in military units… The ministry is in internal talks to confirm whether it is against military regulations.”

The unnamed source reportedly continued to suggest that the tightening of regulations aimed to protect soldiers’ morale against the potential ill-effects of a market as volatile as cryptocurrency.

As of yet, it’s unclear what additional preventative measures the Ministry of Defence will take against those using cryptocurrrency. However, since Monday access to websites about cryptocurrency and exchange pages have been blocked at internet cafes on military bases.

An online notice posted Monday by the military also said:

“According to internal rules, we will gradually shut down internet access to websites on encrypted currency starting Monday… We urge soldiers to refrain from visiting digital token exchanges to avoid disappointment from our decision to block access to relevant sites.”

In addition to the Ministry of Defence getting tough on cryptocurrency, they have also announced that they will offer troops classes on financial education. This is because it is difficult to access such information whilst staying on a base. However, just how free from bias these classes are remains to be seen. It seems likely that any anti-cryptocurrency sentiment running through the government will trickle down to their soldiers’ education.

The news about the military crackdown on Bitcoin and other cryptos comes amid heightened regulatory fear from South Korea. The government there have been posturing about changing legislation regarding digital currencies. It’s unclear how they will go about this at present. Finance Minister Dong-yeon said on Monday that the government were considering whether to shut down domestic crypto exchanges. According to the government minister:

“The thing is the scope of reasonable regulation, but there is no global standard on it… We are coming up with comprehensive regulatory packages, including taxation or real-name-based trading on digital tokens.”

According to their co-chairman Kong Jianping, a company making Bitcoin mining hardware has posted sales of over 1.2 billion yuan (US$ 185.2 million) during 2017. This translates in a profit of a staggering 300 million yuan (US$ 46.6 million). Kong told Chinese media outlet Yicai Global that he anticipates Canaan Creative’s profits to reach 5 billion yuan. This would mean they’d made sales of 10 billion yaun. However, the mining hardware chairperson did not specify a time frame for such a prediction.

Ejinsight, a domestic technology resource claims that Canaan Creative plan to list its shares on the National Equities Exchange and Quotations stock exchange – an over-the-counter way of selling shares in public limited companies in China.

Canaan Creative are one of the planet’s largest manufacturers of ASIC (application-specific integrated circuit) chips. Such components have been tailored towards solving the complex algorithms required to “unlock” the remaining Bitcoin of the total supply of 21 million. The company filed their interest in listing shares on the NEEQ in August of last year.

Canaan Creative itself was founded in 2013 and according to Ejinsight, units they’d sold up until last April accounted for 22% of the global mining hash power on the Bitcoin network. Sales have been steadily increasing inline with surging interest in cryptocurrency since they began selling hardware chips designed for the purpose of mining. The local technology news source claims that of the 400 unique customers Canaan Creative have served, 97% of them are based in China.

However, with news of Chinese hostility towards the cryptocurrency mining industry and so many of Canaan Creative’s clients being located within the country, it seems hard to believe the projections of Kong. Recently the Chinese government have made efforts to squeeze Bitcoin miners out of their nation. Whilst the Beijing government has not expressly banned the practice, certain clampdowns on allowed electricity and land usage, as well as environmental regulation and tax collection, targets those engaging in the highly profitable and hugely power consuming activity.

According to the Financial Times, as part of their agenda against Bitcoin miners, a multi-agency task force has been set up to aid companies from exiting the mining industry.

The clampdown on mining is not the only hostility the Chinese government have shown towards the cryptocurrency space. During September of last year, legislators there banned the innovative fund raising practice known as initial coin offerings (ICOs). On top of this, several key exchanges also ceasing doing business in the second half of 2017. Evidently, Bitcoin and cryptocurrencies are not currently seen as being inline with Chinese economic interests.

Indonesia’s Central Bank, Bank Indonesia (BI), have united with the national police service to tackle the illegal use of Bitcoin in Bali. According to them, the tourist hot spot is much more likely to attract people trying to use the cryptocurrency for transactions that are outside the law. The Jakarta Post and local language news source report that on Saturday, January 13, a senior member from BI, Causa Iman Karana, announced the clampdown in Dempasar, the capital of the romantic island getaway location:

“We are looking out for bitcoin transactions in Bali, particularly in tourist spots. We will take measures against non-rupiah transactions.”

Karana also called on the people of Bali to not accept transactions using digital money. For the banker, it is the lack of central authority regulating transactions that is a primary cause for concern. Like most central bankers, the fear of their own pending redundancy was also a likely motivating factor behind his words.

This recent  crackdown in Bali is part of a wider initiative against the use of cryptocurrency in the nation of Indonesia. According to national legislators, making transactions in Bitcoin violates Law No. 7/2011 on currency. This recent reiteration underlines the initiative penned at the bank late last year. In early December, Bank Indonesia issued BI Regulation No. PBI: 19/12/PBI/2017. This expressly banned the use of digital currency in Indonesia and stated that all transactions and payments must be made using the national currency, the rupiah. A spokesperson for the bank, Agusman, at the time spoke of the risks posed to those getting involved in the digital currency space. Like Karana, he too deemed the primary issue with virtual money transactions the lack of centralised control:

“We warned people not to carry out transactions with virtual money because there is no authority that regulates the transactions.”

The bank spokesperson went on to highlight the speculative risk of using Bitcoin and other cryptocurrencies. Also amongst his concerns were the dangerous posed to the state because of money laundering, as well as the ease with which virtual currencies could be used to finance terrorism. Agusman concluded with a straight forward message for the people of his country:

Therefore, [BI] wants all parties not to sell, buy or trade the virtual currency.

Indonesia isn’t the first and it certainly won’t be the last country who attempts to stamp out the use of virtual currencies by force. Across the globe, Bolivia, Algeria, Ecuador, and Nepal are amongst those nations that have issued an outright ban on the use and trading of digital currencies. However, such small economies are incapable of moving the price of BTC or any other currency in any dramatic fashion. If the global popularity of crypto continues to grow, it’s likely that these States will be forced to liberalise their knee-jerk legislation or else get left further behind the planet’s larger economies.


According to a note issued by HBSC economic analyst James Pomeroy, Sweden could be the first nation to issue their own cryptocurrency. A document, which was sent to clients this week, titled “Sweden’s Big Year: Can the Economy Overcome Some Challenges?” set forth some rudimentary proposals of what an e-krona might look like.

The international bank that is HSBC calls the Swedish economy “one of the world’s most interesting”. It would be a fitting place to roll out a central-bank-issued, digital currency as they have one of the lowest actual cash usage rates on the planet. According to Business Insider, the use of cash is actively discouraged by shops and other businesses offering various goods and services. The business-focused news source also highlights anecdotal stories of beggars and buskers having their own card terminals to take electronic payments out in the street.

The HSBC-issued note states that the launch of a so-called “e-krona” might not happen this year but is something that may occur within the next few years.

Sweden’s Riksbank have identified two possible ways that a centrally issued digital currency could work. One is based on value, the other is on a register system. HSBC claim that the first option “would be more like cash is at present, with value stored on an app or a card rather than in a central database”. Meanwhile, the second option would use a register-based system. This would mean that e-krona would be stored on centrally registered accounts themselves. According to Pomeroy, the second option is:

“… more complex, but may make the framework easier to expand and develop over time, and would likely require the use of blockchain technology.”

Meanwhile, Sweden’s central bank has stated that it would consider using a combination of both options. The HSBC analyst added:

“A Central Bank Cryptocurrency (CBCC) would use blockchain technology, whereas a non-blockchain solution would make the e-Krona a ‘deposited currency account’.”

In addition to the fact that Sweden are already moving quickly towards a cashless society, the history of financial innovation within the State makes their efforts to be the first to launch a national digital currency fitting. Over 350 years ago, it was in Sweden that the first modern banknote was created. It’s therefore appropriate that things have moved full-circle and it is in the Scandinavian nation that cash itself might finally cease to exist.

Sweden are by no means the only country to consider launching their own digital currency though. Over the Christmas break, the Bank of England made headlines after speculation increased over them launching their own virtual currency later this year. There has also been talk of a CryptoRuble from Russia, and recently Ukraine have hinted towards similar via their own Facebook page.


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One of the latest pop groups to emerge out of Japan are the trend-riding Kasotsuka Shojo. The name translates to Virtual Currency Girls and in typical J-Pop style, each of the eight members wear a different costume representing one of the largest cryptocurrencies. Amongst the performers are Bitcoin, Bitcoin Cash, NEM, and Ethereum.

The all-girl band are seeking to educate the public about digital currencies from a wider angle than simply pure speculation. This is evidenced by their first song, “The Moon and Virtual Currencies and Me” and another tune which includes the lyrics, “Don’t forget about two-step verification,” and “Never use the same password twice”.

Kasotsuka Shojo were created by the Japanese girl band factory that is the Cinderella Academy. The entertainment company also manages several other popular groups.

The crypto-themed band played their first show in Tokyo last Friday. It was an action-packed thirty minutes in which the eight-piece explained the benefits of using electronic currencies, as well as the present security risks faced by those in the space. During the performance, various dramas from the digital currency space were acted out on stage. In one such vignette, the girls representing Bitcoin and Bitcoin Cash had a scrap over Hinano Shirahama’s (BTC) assumed leadership of the cryptocurrency world. BCH’s representative, Rara Naruse, declared:

“The surge of Bitcoin caused various problems. To solve these, Bitcoin Cash was established, with smaller fees and quicker transactions. So I think Bitcoin Cash will replace Bitcoin at some point in the future. The market cap of Bitcoin Cash will be number one!”

It should come as little surprise that the world’s first cryptocurrency-themed pop group hails from Japan. Besides the nation’s love of music that often seems quirky but is sometimes downright bizarre to us in the West, Japan are also trend-setters in the treatment of Bitcoin as legal tender there. At one stage, the island State accounted for the largest share of global Bitcoin trading and their Tokyo-based BitFlyer exchange platform continues to be one of the planet’s largest. Quartz report the research of Japanese finance company Nomura. They state that thanks to the sharp rise in the price of Bitcoin over the last twelve months, combined with Japan’s embrace of the technology, has helped their GDP to the tune of 0.3%.


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A prominent Iranian banker has come out in support of digital currencies. Masoud Khatouni, a senior member at Iran’s largest bank, has called for Bitcoin and other cryptos to be recognised and accepted into the nation’s banking system. According to Bank Meli Iran’s deputy for information technology and communications:

“Iran must formally recognise activities using digital currencies as they are currently shaping the future of banking. Banks themselves must also enter this field to use them.”

Khatouni’s stance is markedly different from other prominent bankers in Iran, however. The governor of the Central Bank of Iran (CBI) and their head of innovative technologies have both recently urged citizens to exercise great caution when dealing with digital currencies.

However, Khatouni believes that his nation could benefit from digital currency, particularly as they have a history of dealing with the burden of economic sanctions. He told prominent Iranian financial news source IBENA:

“The future of banking throughout the world is intertwined with digital currencies, which are entering the banks silently as most banks remain oblivious to their presence.”

The BMI official went on to state that there should be “no limitations” on the use of digital currencies. This, he believes, will allow companies to reap the benefits of cryptos with greater confidence and transparency. He proposed that the CBI should create a group entirely focused on integrating digital currencies into their banking practices. Such a department should then be used to determine regulations going forward.

“I ask central bank officials to refrain from creating restrictions for digital currencies by way of laws and regulations, because based on the current realities of the world, they have taken form and the Iranian people have also moved toward them.”

Despite the mixed signals coming from Iran’s banking sector, it appears that the nation is generally supportive of cryptocurrencies. In October last year, we reported on the Iranian central bank’s desire to see a cryptocurrency infrastructure developed for the nation. Nima Amirshekari, head of Electronic Banking at the Monetary and Banking Institute, said:

“CBI views it [Bitcoin] as something that can be controlled and does not see it as multi-level marketing or a pyramid scheme.” 

It’s believed that the Middle Eastern State are aiming to have a regulatory frame work for digital currencies setup by September of this year. How this will sit with the religious elements of the nation’s leadership remains to be seen, however. Member of parliament Mohammad Reza Pour-Ebrahimi believes that digital currency is against Islam. This sentiment was echoed as recently as last week in Egypt too. Counsellor of the Republican’s Mufti, Dr. Magdy Ashour told a local news source that Bitcoin was “not an Islamic concept”.


The US Securities and Exchange Commission (SEC) has issued its second warning in a month to those investing in cryptocurrencies. In a statement earlier today, the governmental body advised those involved in the space to “exercise caution” with Bitcoin and other digital currencies. SEC Chairman Jay Clayton, along with Commissioners Kara Stein and Michael Piwowar, said many companies hosting initial coin offerings were not doing so within compliance of federal and state securities regulations.

They went on to state that whilst legislators were attempting to keep pace with the rapidly evolving markets, policing them is difficult and thus investors must use their due diligence when deciding whether to get involved with crypto investments.

According to a report by Reuters, the Commissioners’ statement read:

 “The SEC and state securities regulators are pursuing violations, but we again caution you that, if you lose money, there is a substantial risk that our efforts will not result in a recovery of your investment.”

As mentioned, today’s warning is the second from the SEC in less than a month. On Monday 11 December, Jay Clayton advised caution to those wishing to partake in initial coin offerings. The SEC Chairman’s statement came just hours after the Commission were forced to intervene in an ICO being held by a restaurant review application. The issue arose due to the company not registering as a security:

“A number of concerns have been raised regarding the cryptocurrency and ICO markets, including that … there is substantially less investor protection than in our traditional securities markets, with correspondingly greater opportunities for fraud and manipulation… If an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost.”

Despite the frequency with which the SEC are issuing warnings surrounding the cryptocurrency space, the Commission seems much more concerned with initial coin offerings than it does with Bitcoin and existing digital currencies for now. The cautionary words should go without saying to anyone hoping to invest in anything.