NedBank, one of South Africa’s large banking institutions, has frozen opening of new cryptocurrency accounts.
In an e-mailed response to ITWeb, the bank says: “Nedbank is in the process of assessing its position in respect of virtual currency dealers/traders.”
While no large crypto exchange in South Africa has experienced any closure of their accounts, word around the industry is that the bank is evaluating its position and may not be onboarding crypto-related businesses in the future.
The absence of any real regulation in the crypto space may be a factor in this new development.
According to Richard De Sousa, CEO of local South African crypto exchange AltCoinTrader:
“Should Nedbank close accounts of crypto businesses, it will further alienate and possibly scare many that are sitting on the fence with crypto-currencies. Having said that, it would also send a message to the crypto industry that banks are threatened by disruptive technology and they will have to defend their position.”
De Sousa points out that Nedbank has been very cautious when dealing with crypto-currency companies and has been constantly evaluating its risk appetite.
Nedbank’s primary market is South Africa. Nedbank also operates in six other countries in the Southern African Development Community (SADC), through subsidiaries and banks in Lesotho, Malawi, Mozambique, Namibia, Swaziland and Zimbabwe, as well as offices in Angola and Kenya.
Just two months ago, FirstRand Bank, FirstRand Bank (FNB), one of the ‘big five banks’ in South Africa, notified major South African cryptocurrency exchanges – Luno, ICE3X, and VALR – that their bank accounts will be closed.
As we had earlier reported, the decision by FNB would likely embolden other financial institutions to take a similar stand which seems to be the case.
NB: We shall update on the story as it unfolds
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