Danske Bank now allows retail customers to trade exchange‑traded products that track bitcoin and ethereum directly in the bank’s trading platform. The offering covers a limited selection of crypto ETPs, which the bank describes as highly risky.
Danske Bank is expanding its offering in online banking and mobile banking with new investment products related to cryptocurrency. The background is increased demand from customers and a more regulated framework in the EU, while the bank maintains that cryptocurrency is a high-risk asset class.
Clients can now gain exposure to bitcoin and ethereum through so-called Exchange Traded Products (ETPs), which are listed investment products tied to the underlying cryptocurrencies. The investment is made from the bank's regular trading platform, without the customer needing their own digital wallet or handling cryptocurrency storage.
The offer is aimed at customers who make investment decisions themselves, without advice from the bank. Danske Bank clarifies that cryptocurrency is still considered an “extremely risky” asset class that can cause large losses.
According to the bank, the launch is a response to several inquiries from customers who want the opportunity to include cryptocurrency in their portfolio. At the same time, the Bank notes that the regulation of the market has been strengthened, including through the European Union's regulatory framework for crypto assets (MiCA), which, according to the bank, has contributed to increased confidence in these types of products.
“As cryptocurrencies have become a more widespread asset class, we are getting more and more inquiries from customers who want the option to invest in cryptocurrencies as part of their investments,” says Kerstin Lysholm, Head of Investment Products and Offering at Danske Bank. She adds that overall, the bank considers that the time is now ripe to offer cryptocurrency investment products to clients who are aware of the risks.
Although customers get access to crypto ETPs, Danske Bank does not offer advice on these products. The bank describes investments in cryptocurrency as opportunistic rather than part of a long-term portfolio strategy.
Lysholm stresses that access to the ETPs should not be interpreted as an endorsement of cryptocurrency as an asset class on the part of the bank. Customers need to assess for themselves whether the products fit into their risk profile and investment strategy.
In the first instance, customers get access to three ETPs, with two following developments in bitcoin and one product following ethereum. The products are issued by the asset managers BlackRock and WisdomTree, which the bank describes as reputable market participants.
Danske Bank highlights that the ETP structure provides the opportunity to trade quickly and easily, while the storage of the underlying cryptocurrencies takes place in a regulated framework via the relevant managers. The products are covered by MiFID II regulation, which the bank points to as strengthening investor protection and transparency, including in terms of ongoing costs.
As part of investor protection, clients must undergo a suitability assessment before they can invest in the crypto ETPs. It implies that they answer questions about experience, knowledge and risk understanding related to this type of product.
Only when the bank has assessed the appropriateness of the products for the individual customer does it open for trading in the trading platform. The bank highlights this as a measure to ensure that clients understand the risks and distinctiveness of investments in cryptocurrency ETPs underlying them.