When we talk with our clients for the first few times, they always show a resigned attitude towards the opening of a bank account for their business, because they think there is no such thing as crypto-friendly banks in Europe. When it comes to open a bank account, apparently there is no welcoming jurisdiction for crypto businesses.
In fact, it is not a matter of jurisdiction, because cases of rejected applications have been reported in Estonia, Malta, and even Switzerland, a pioneer for many things in this sector.
The cause of the problem
Actual laws and regulations do allow crypto businesses to open a bank account, there is no limitation on this. However, it is the risk appetite of the banks across Europe that turn such a simple operation into a nightmare, so even though we label countries as crypto-friendly, their banks are not friendly alike.
While top-tier banks are getting more crypto-curious, most see the growing number of companies in the industry as they have since day one: ticking regulatory time bombs. Or competitors they don’t want to deal with.
Digital currencies have attracted outlaws since the first one, Bitcoin, appeared a decade ago, because they might obscure the identities of parties in a transaction and operate outside the regulated financial system.
Though legitimate uses have sprouted in recent years, it is simpler for banks to maintain a blanket prohibition.
The situation in Malta
Maltese banks are often pictured like some of the few crypto-friendly banks in Europe, but their current position is way off that path.
The main reason why many Maltese crypto businesses seem to get doors shut from pretty much all banks is the extremely high cost of KYC/AML compliance measures required, which penalises all Blockchain businesses, regardless of their correlation with cryptocurrencies.
Although the government put some effort into providing clear regulations to assure banks and speed up processes for crypto start-ups, there are still some concerns, which, however, did not deter emerging crypto companies from choosing the little Mediterranean island as their registered office location.
Are there any crypto-friendly banks in Europe at all?
When crypto companies can’t open a bank account, fundamental problems arise: they cannot pay wages to their employees, they cannot pay suppliers and external consultants, they cannot take payments, and they cannot create a credit history.
As a Blockchain consultancy group, we have solid relationships in place with some financial institutions and European banks, so our clients usually encounter fewer problems on this important matter. This also makes us think about how important is having a team of professionals who can develop a strategy and a proper presentation of the business project in order to assure banks on our intentions.
At the same time, something is coming down the pike in Switzerland, with SEBA and Sygnum preparing some crypto-friendly accounts. We talked about this in our Blockchain Bulletin #9. Check it for further information.
SEBA is planning to offer institutional clients with a full array of banking services comprising of banking accounts, custody services in both fiat and digital assets, trading, liquidity management, digital asset loans as well as state-of-the-art tokenisation solutions, while Sygnum is placing a digital custody service and a crypto-fiat gateway, allowing clients to safely exchange fiat currency with Bitcoin, Ethereum, and a few other options. Furthermore, they also have in place an interesting tokenisation solution.
In the end, crypto-friendly banks in Europe do not officially exist, but in spite of the current status, we are still able to offer some valuable solutions to our clients. If you are interested, feel free to contact us for a free introductory consulting.