Bitcoin: Fineco Bank allows green investments

A few days ago, Fineco Bank was awarded EMAS certification. 

This is an award given to those organizations that adopt an environmental policy that can reduce their impact in a concrete and measurable way. 

After receiving this certification, the international rating agency MSCI raised its sustainability rating to “AA” level.

Fineco Bank achieves EMAS certification

To achieve this, the Italian bank adopted a full-fledged Environmental Management System, covering all direct and indirect environmental aspects generated by all activities carried out both at the company’s offices and in those of its commercial network in Italy. 

Among the various activities carried out by Fineco is that of allowing its customers to invest in Bitcoin and cryptocurrencies. 

Indeed, in March the bank had announced that it would begin offering CFDs (Contracts for Difference) on Bitcoin Futures and other cryptocurrencies, so as to allow its clients to trade these assets using OTC instruments. 

Given that the main criticism levelled at Bitcoin by its detractors is towards the high energy consumption of mining, and thus the resulting environmental impact, Fineco’s initiative might appeal to those speculators who do not want to remain distant from Bitcoin but at the same time are environmentally conscious. 

Truth be told, Fineco’s environmental initiative does not have any positive impact on the environmental consequences of Bitcoin mining, but merely offers its customers financial products that have lesser, sustainable impact.

The crypto CFDs offered by Fineco to its clients are standard derivative financial products, which in turn are not based on Bitcoin but on other derivative products (Futures). Thereby the bank is in no way forced to have to use or manage BTC in order to offer Bitcoin trading to its clients. 

CFDs replicate the price of Bitcoin, but the custody and management of the underlying BTC is delegated to outside companies, particularly those that issue the Futures on which Fineco’s CFDs are based. 

The Italian bank is not new to these kinds of collaborations with other financial companies. 

Fineco Bank’s collaborations: Bitcoin and the traditional system

For example, last week it announced that it had selected France’s Bnp Paribas as an external provider of a wide range of investment banking services on the new equity and bond ETFs listed on the Italian stock exchange.

This specific initiative allowed Fineco Asset Management (FAM) to enter the ETF market as well, so as to diversify and enhance its product offering aimed at the FinecoBank network.

Therefore, for months now, the Italian bank has been implementing a diversification strategy that allows it to offer its investor and speculator clients more and more products on which to trade. Among these, of course, are products for speculating on crypto markets. 

In addition to all this, Fineco is also pursuing another strategy, which is to make its activities environmentally sustainable, thanks to appropriate certifications that provide clients with guarantees in this regard. 

While all this helps the bank to be more environmentally sustainable, it does not solve Bitcoin’s energy problem in the slightest. 

Moreover, while on Tuesday FBK’s shares on the stock exchange had gained 3% after the EMAS certification announcement, the following day it lost everything it had gained the day before, returning below €12.7. 

However, it is worth noting that this is a price level already touched in March, and around which it has already fluctuated between late May and early June. Indeed, the yearly low peak was touched in mid-June, below €10.2, so the current level does not seem worrisome at all. 

Moreover, since the November 2021 highs, the stock has lost only 27%, much less than many other banking stocks. 

By now, there are several Italian banking groups that have also started trading in crypto markets. Probably Fineco, together with Sella and Generali, is among the most active Italian banks in this new sector, also because other banks such as Unicredit on the other hand have been much less open-minded. 

The Italian banking system and the relationship with the crypto world

In Italy, the attitude of traditional banks towards cryptocurrencies on average is certainly not one of openness, while in other European countries it turns out to be less closed. However, a distinction must be made between banks that are more traditional, and therefore closed-minded, and banks that are more open to exploration. 

Italian banks have often simply continued to do what they have always done, with an almost total closure to financial innovation. However, this scenario is changing, both due to some banks that are more open to experimentation and because of the fact that being confined to sticking up for established positions is not really worthwhile nowadays. 

The Italian banking sector has been in crisis for some time now, to the extent that, for example, Unicredit’s shares on the stock market have lost more than 95% of their value since April 2007, that is, before the great financial crisis of 2008. 

Even just taking pre-crisis values as a reference, the same stock has lost 19% since February 2020. By contrast, since its peak in November 2021, it has lost 29%, or slightly more than the Fineco stock. 

The shares of Italy’s other major banking group, Intesa Sanpaolo, also do not look good at all. They lose as much as 38% from the February 2022 highs, and 28% from pre-pandemic levels. Not to mention the -71% accumulated since May 2007. 

It is worth noting that the FinecoBank stock did not yet exist on the stock exchange in 2007, as it was not listed until 2014, but since then it has risen 212%. During the same period, Unicredit stock lost 67%, while Intesa Sanpaolo stock lost 31%. 

A fairly clear trend seems to emerge from these comparisons: banks that are more open to innovations are growing, even in Italy, while more traditional banks that are protecting their established positions are losing.