Crypto Assets: Balancing Risk and Reward in an Evolving Financial World

    In September, JPMorgan’s Chase UK announced it would ban customers from making cryptocurrency payments. The ban was to come into effect starting 15th October. The bank cited the rising fraud and scams related to crypto assets.

    Customers were informed that whilst they would still be able to make payments through other banks, there was a possibility that they might not be able to get their money back. 

    We’ve seen an increase in the number of crypto scams targeting UK consumers, so we have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account,” the Chase spokesperson said.

    It is not the first UK bank to impose restrictions on crypto transactions. Nationwide recently announced it would not allow payments to crypto exchanges with its credit cards. It also imposed a £5,000 daily limit on crypto spending.

    Similarly, in February, HSBC imposed restrictions on the purchase of cryptocurrencies. Its customers can no longer purchase cryptocurrencies using the HSBC credit card. Soon after, in March, NatWest imposed limits on how much its customers could spend daily and monthly on crypto exchanges.

    All of these banks say these measures are to protect their customers from crypto fraud and scams. But, are these steps necessary? 

    To understand that, first, you need to know what crypto assets are.

    What Are Crypto Assets?

    Crypto assets, or cryptocurrency assets, are purely digital or virtual currencies that use cryptography for security. They are not controlled by any central authority like a government or a bank. Instead, they operate on decentralised networks based on blockchain technology. 

    The most well-known crypto asset is Bitcoin, but there are thousands of other cryptocurrencies with various features and uses. People often buy and hold these assets as investments or use them for online transactions. 

    Cryptoassets like Bitcoin and Ethereum have gotten a lot of attention. Some people have profited greatly from them. However, they come with a certain amount of risks. 

    Risks of Using Crypto Assets

    High Volatility

    The value of crypto assets can fluctuate dramatically, potentially leading to significant losses. Additionally, many blockchain companies compete for investment, but not all succeed.

    Theft Risk

    Crypto assets can only be bought and sold on cryptocurrency exchanges, which are tempting targets for hackers. If a breach occurs, investors may not be able to recover their funds.

    Limited Usability

    Most retailers do not accept crypto assets as payment. So, they must be sold on exchanges. These come with their own security challenges. If you lose the password to your crypto assets, you lose access to your investment.

    Lack of Regulation

    Crypto assets are largely unregulated. That makes it difficult for you to distinguish between legitimate investments and scams. 

    Also, if your investment is stolen, regulatory bodies can’t help you.

    Lack of Protection

    Organisations like the Financial Conduct Authority (FCA) or Financial Services Compensation Scheme (FSCS) do not typically protect crypto assets. Additionally, the use of cryptocurrencies depends on national authorities. So, if they are banned, you can’t cash in your investment. That’s what happened in China.

    Of course, it’s not all bad. Crypto assets do have some advantages.

    Benefits Offered by Crypto Assets


    Crypto assets are not controlled by central authorities like governments or banks. Users have full control over their crypto assets and private keys, reducing the reliance on third parties like banks. That can reduce the risk of government interference or manipulation. That seems to be a driving factor for those who believe that the government could freeze their accounts or take their money in times of crisis.


    They provide access to financial services for individuals who are unbanked or underbanked, especially in regions with limited access to traditional banking. They can bring financial services to people who are excluded from the traditional banking system, potentially reducing financial inequality.


    Physical money can be faked. However, the use of blockchain technology and cryptography makes crypto assets highly secure and resistant to fraud or counterfeiting. Blockchain technology provides a public ledger that records all transactions, enhancing transparency and reducing the risk of fraud. Each entry is assigned an ID. This ID is stored in the devices of everyone in the network. 

    Every subsequent transaction creates another “block” in the “chain”. To go back and make and make an edit to a previous entry would require agreement between all parties involved. So, a bad actor can’t take over one account and steal assets.

    Global Transactions

    Cryptocurrency markets operate 24/7. That allows users to trade or make transactions at any time, unlike traditional financial markets with limited hours. These assets can be transferred and received internationally, making cross-border transactions faster. 

    And, they are potentially more cost-effective. No financial organisations are acting as intermediaries, so there are no fees involved. As a result, transaction fees are lower compared to traditional financial services, especially for international transfers.

    Investment Opportunities

    Some individuals have experienced significant returns on their investments in cryptocurrencies. This is both a risk and a benefit. It can give great returns on investment. On the other hand, if it fails, you can end up losing all your money.

    The blockchain technology underlying crypto assets has the potential to drive innovation in various industries beyond finance. These include digital marketing, supply chain management, voting systems, identity verification, the internet of things, and more.

    Some view cryptocurrencies like Bitcoin as a store of value, similar to gold. They turn to them as a hedge against inflation.

    The Ongoing Debate on Cryptocurrency Regulation

    Now that we’ve looked at the risks and benefits of crypto assets, let’s zoom out and look at the bigger picture. JPMorgan Chase blocking crypto transactions in the UK brings attention to the ongoing debate about regulating and accepting digital currencies.

    The heart of the matter lies in regulation. Who should decide what’s allowed and what’s not in the world of crypto? Should it be the financial institutions themselves, or should it be the government? Coinbase CEO Brian Armstrong has expressed his displeasure with JPMorgan Chase’s actions. He suggests that government oversight should play a more significant role in shaping the cryptocurrency landscape.

    Interestingly, while some banks are implementing restrictions, the UK government has shown ambition to become a “Web3 and crypto hub.” 

    Economic Secretary to the Treasury, Andrew Griffith, indicated that the UK is actively working on legislation to regulate retail trading in crypto assets. This suggests a desire to balance the potential benefits of cryptocurrencies with necessary safeguards.

    Several businesses, including marketing agencies like Geeky Tech, are willing to accept payment in cryptocurrencies.

    It’s not just the UK. Countries worldwide are positioning themselves as crypto-friendly destinations. On the flip side, others, like the United States, are taking a more stringent approach to cryptocurrency firms.

    The debate on crypto assets’ role in our financial systems is far from over. While their benefits and innovations are clear, challenges and risks persist. As the crypto industry continues to evolve, government regulators, financial institutions, and crypto enthusiasts will need to navigate these uncharted waters together.

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