The news headlines this week is that several banks in the USA and the UK have banned the utilization of bank cards to purchase crypto currencies (CC’s). The stated reasons are impossible to believe – like trying to curtail money laundering, gambling, and protecting the retail investor from excessive risk. Interestingly, the banks will allow bank card purchases, which makes it clear that the only risks being protected are their own.
With a charge card you can gamble at a casino, buy guns, drugs, alcohol, pornography, everything and anything you want, but some banks and charge card companies wish to prohibit you from using their facilities to purchase crypto currencies? There has to be some believable reasons, and they are NOT the causes stated.
One thing that banks are afraid of is how difficult it should be to confiscate CC holdings once the charge card holder defaults on payment. It would become more difficult than re-possessing a residence or a car. A crypto wallet’s private keys could be put on a memory stick or a bit of paper and easily taken off the united states, with little if any trace of its whereabouts. bsc airdrops There could be a high value in some crypto wallets, and the charge card debt may never be repaid, ultimately causing a declaration of bankruptcy and a substantial loss for the bank. The wallet still contains the crypto currency, and the dog owner can later access the private keys and make use of a local CC Exchange in a foreign country to convert and pocket the money. A nefarious scenario indeed.
We are most certainly not advocating this sort of unlawful behavior, but the banks are aware of the likelihood and many of them wish to shut it down. This can’t happen with debit cards since the banks are never out-of-pocket – the amount of money comes from your account immediately, and only if you have 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 can be bogus. The fallout from these actions is that investors and customers are now aware that charge card companies and banks do have the capacity to restrict what you can buy with their credit card. This isn’t how they advertise their cards, and it is probable a surprise to the majority of users, that are quite used to deciding for themselves what they will purchase, especially from CC Exchanges and all the other merchants who’ve established Merchant Agreements with 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 their education to which the banking industry feels threatened by Crypto Currencies.
At this time there is little cooperation, trust, or understanding between the fiat money world and the CC world. The CC world does not have any central controlling body where regulations could be implemented throughout the board, and that leaves each country all over the world trying to find out what to do. China has made a decision to ban CC’s, Singapore and Japan embrace them, and a great many other countries remain scratching their heads. What they have 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 web 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 due to their music, rather than endless pirating, and the music industry (artists, producers, record companies) were OK with reasonable licensing fees rather than nothing. Can there be compromise in the continuing future of fiat and digital currencies? As people all over the world get more completely fed up with outrageous bank profits and bank overreach within their lives, there is hope that consumers will be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.