The news this week is that several banks in the USA and the UK have banned the usage of charge cards to purchase crypto currencies (CC’s). The stated reasons are impossible to trust – like attempting to curtail money laundering, gambling, and protecting the retail investor from excessive risk. Interestingly, the banks will allow bank card purchases, making it clear that the only real risks being protected are their own.
With a bank card you are able to gamble at a casino, buy guns, drugs, alcohol, pornography, everything and anything you want, however many banks and bank card companies want to prohibit you from utilizing their facilities to purchase crypto currencies? There must be some believable reasons, and they are NOT the reason why stated.
A very important factor that banks are frightened of is how difficult it should be to confiscate CC holdings when the bank card holder defaults on payment. It would be more difficult than re-possessing a residence or even a car. A crypto wallet’s private keys could be placed on a memory stick or a bit of paper and easily removed from the country, with little or no trace of its whereabouts. There can be quite a high value in a few crypto wallets, and the bank card debt may never be repaid, ultimately causing a declaration of bankruptcy and an important loss for the bank. The wallet still provides the crypto currency, and the owner can later access the private keys and work with a local CC Exchange in a foreign country to convert and pocket the money. A nefarious scenario indeed.
We’re definitely not advocating this type of unlawful behavior, but the banks are conscious of the likelihood and some of them want to shut it down. This can’t happen with debit cards since the banks are never out-of-pocket – the amount of money comes out of your account immediately, and only when there is enough of your cash there to begin with. We struggle to find any honesty in the bank’s story about curtailing gambling and risk taking. It’s interesting that Canadian banks are not jumping on this bandwagon, perhaps realizing that the stated reasons for doing so are bogus. The fallout from these actions is that investors and customers are now aware that bank card companies and banks really do have the capability to restrict what you can purchase using their credit card. This isn’t how they advertise their cards, and it is likely a shock to many users, who are quite used to deciding for themselves what they’ll purchase, especially from CC Exchanges and all the other merchants who have established Merchant Agreements with one of these banks. The Exchanges have done nothing wrong – neither have you – but fear and greed in the banking industry is causing strange things to happen. This further illustrates the degree to that the banking industry feels threatened by Crypto Currencies. sale token price
At this time there is little cooperation, trust, or understanding involving the fiat money world and the CC world. The CC world doesn’t have central controlling body where regulations could be implemented throughout the board, and that leaves each country around the world trying to figure out what things to do. China has chose to ban CC’s, Singapore and Japan embrace them, and many other countries continue to be scratching their heads. What they’ve in keeping is that they want to collect taxes on CC investment profits. This isn’t too unlike the first days of digital music, with the net facilitating the unfettered proliferation and distribution of unlicensed music. Digital music licensing schemes were eventually developed and accepted, as listeners were OK with paying something because of their music, as opposed to endless pirating, and the music industry (artists, producers, record companies) were OK with reasonable licensing fees as opposed to nothing. Can there be compromise in the future of fiat and digital currencies? As people around the world have more fed up with outrageous bank profits and bank overreach within their lives, there is hope that consumers will undoubtedly be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.