- Natwest recently became the latest bank to limit customers’ cryptocurrency spending
- The June 24 restriction applies to all cryptocurrency exchanges
- Customers should be free to spend their money on what they want, as long as it’s not 100% a scam or illegal
The news that another bank, Natwest, has stepped in to stop cryptocurrency buyers from using their own money to buy digital assets has highlighted the precise reason why we need decentralized financial systems. Natwest is the latest in a line of traditional financial institutions who have limited what their customers can spend their money on under the guide of ‘protection’, but this is to suggest that all users, even those who may work extensively in the cryptocurrency sector, need protection.
Natwest Limiting Cryptocurrency Spending
Reuters revealed yesterday that Natwest were “temporarily reducing the maximum daily amount that a customer can send to cryptocurrency exchanges” following “a high level of cryptocurrency investment scams targeting our customers”.
The limitation, which was not specified and came into force on June 24, also affected “a small number of cryptocurrency asset firms where we have seen particularly significant levels of fraud-related harm for our customers.” Among the platforms targeted was Binance, which has been the subject of several headlines regarding regulation in recent days.
Natwest is far from being the only bank that has limited where their customers can buy cryptocurrency and how much they can buy – Starling bank banned all payments to cryptocurrency platforms last month – and the bank is doing what it thinks is best for its customers. The fact is however that people should be free to buy whatever they want with their own money if it is not illegal, including cryptocurrencies.
DeFi Can Eliminate Banks’ Power
If platforms are reported to the police and are clearly 100% scams then it makes sense to block them, but issuing a blanket limitation on all cryptocurrency exchanges is tarring them all with the same brush and denying customers their right to spend their own hard earned money on something that is not in any way illegal.
DeFi promises many things, and if it can find a way round these ad hoc limitations that banks place on their customers as and when they feel like it then it can’t come soon enough.