The headlines this week is that several banks in the USA and the UK have banned the usage of bank cards to purchase crypto currencies (CC’s). The stated reasons are impossible to think – like wanting to curtail money laundering, gambling, and protecting the retail investor from excessive risk. Interestingly, the banks will allow bank card purchases, rendering 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 need, but some banks and credit card companies desire to prohibit you from using their facilities to purchase crypto currencies? There has to be some believable reasons, and they are NOT the reason why stated.
One thing that banks are frightened of is how difficult it should be to confiscate CC holdings when the credit 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 can be put on a memory stick or a bit of paper and easily taken off the country, with minimum trace of its whereabouts. There can be a high value in certain crypto wallets, and the credit card debt may never be repaid, resulting in a declaration of bankruptcy and a significant loss for the bank. The wallet still contains the crypto currency, and the owner can later access the private keys and use a local CC Exchange in a foreign country to convert and pocket the money. A nefarious scenario indeed.
We’re most certainly not advocating this type of unlawful behavior, however the banks are aware of the chance and some of them desire to shut it down. This can’t happen with debit cards whilst the banks are never out-of-pocket – the amount of money comes out of your account immediately, and only if there is enough of your hard earned money 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 with this bandwagon, perhaps realizing that the stated reasons for doing so are bogus. The fallout from these actions is that investors and people are now aware that credit card companies and banks really do have the capacity to restrict what you can get making use of their credit card. This is simply not 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 your banks. The Exchanges did nothing wrong – neither perhaps you have – but fear and greed in the banking industry is causing strange things to happen. This further illustrates the degree to which the banking industry feels threatened by Crypto Cu ieo binance rrencies.
At this time there’s 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 can be implemented over the board, and that leaves each country around the globe trying to figure out what things to do. China has chose to ban CC’s, Singapore and Japan embrace them, and a great many other countries are still scratching their heads. What they’ve in common is that they want to collect taxes on CC investment profits. This is simply not too unlike the early days of digital music, with the internet 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, 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 continuing future of fiat and digital currencies? As people around the globe have more fed up with outrageous bank profits and bank overreach into their lives, there’s hope that consumers will undoubtedly be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.