Scandinavia’s largest bank, Nordea, has reversed its stance on cryptocurrencies in the face of growing adoption and regulatory clarity, announcing that customers will be able to access external Bitcoin-linked exchange traded products (ETPs) in December.
The Bitcoin ETP, developed by digital asset investment firm CoinShares, holds Bitcoin (BTC) as its underlying asset, Nordea announced on Thursday.
The ETP is “only offered as an execution-only product, which means customers can purchase this product, but Nordea does not provide advice on it,” the bank added.
According to half-year results released in July, Nordea has assets under management of more than $286 billion and a customer base of more than 10 million people.
Regulation is a key factor in Bitcoin’s reversal
Nordea announced in 2018 that it would ban its employees from buying and holding Bitcoin, citing concerns that the cryptocurrency market was unregulated, and later said in an earnings call that it had “no risk appetite or direct exposure to cryptocurrencies.”
The bank said this change of heart is a direct result of increased regulation and market maturation, citing the European Cryptoassets Market Regulation (MiCA) as a specific example.
“Nordea has been closely monitoring developments in cryptocurrencies, but maintained a cautious approach due to the unregulated nature of cryptoassets and the lack of investor protection and regulatory oversight that has dominated the emergence of digital currencies,” Nordea said.
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“With this backdrop, Nordea remains proactive in providing products and services that meet the needs of our customers as the environment matures.”
Demand is also an important consideration
Nordea said that in addition to regulation, there is growing demand for cryptocurrencies across the Nordic countries, which was another reason for the decision.
“The market for crypto-related investment products backed by cryptocurrencies, particularly exchange traded products, is growing rapidly in Europe as institutional and retail investors seek to gain exposure to digital assets within established financial markets.”
According to a Nordic cryptocurrency adoption survey conducted in March by digital asset firm K33, there are approximately 2.1 million cryptocurrency owners in the entire Nordic region, which includes Denmark, Norway, Sweden, and Finland, out of an estimated population of more than 28 million people.
This figure is up from the 1.5 million recorded last year. Additionally, approximately 28% of all respondents said they plan to purchase cryptocurrencies over the next 10 years, which K33 estimates will increase ownership to 6.4 million by 2035.
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