The news headlines this week is that several banks in the USA and the UK have banned the use of charge 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 allows debit card purchases, making it clear that the only risks being protected are their own.
With a credit card you are able to gamble at a casino, buy guns, drugs, alcohol, pornography, everything and anything you want, however many 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’re NOT the causes stated.
Something that banks are scared of is how difficult it should be to confiscate CC holdings when the credit card holder defaults on payment. It’d be more difficult than re-possessing a residence or a car. A crypto wallet’s private keys could be placed on a memory stick or an item of paper and easily taken off the nation, with minimum trace of its whereabouts. There can be a high value in some crypto wallets, and the credit 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 dog 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 certainly not advocating this kind of unlawful behavior, nevertheless the banks are aware of the likelihood and a number of them desire to shut it down. This can’t happen with debit cards while the banks are never out-of-pocket – the cash comes out of your account immediately, and only if you have enough of your hard earned money there to begin with. We struggle to locate 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 can be bogus. The fallout from these actions is that investors and consumers are now conscious that credit card companies and banks really do have the capability to restrict what you can purchase making use of their credit card. This is simply not how they advertise their cards, and it is probable a surprise to many users, who are quite used to deciding for themselves what they will purchase, especially from CC Exchanges and all of those other merchants who’ve established Merchant Agreements with these banks. The Exchanges have done nothing wrong – neither perhaps you have – but fear and greed in th Apply IEO Launchpad e banking industry is causing strange things to happen. This further illustrates the amount to that your banking industry feels threatened by Crypto Currencies.
At this time there’s little cooperation, trust, or understanding between the fiat money world and the CC world. The CC world has no central controlling body where regulations could be implemented over the board, and that leaves each country around the world trying to find out what things to do. China has made a decision to ban CC’s, Singapore and Japan embrace them, and many other countries remain scratching their heads. What they have in accordance is that they would like to collect taxes on CC investment profits. This is simply not too unlike the early 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 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 ongoing future of fiat and digital currencies? As people around the world get more completely fed up with outrageous bank profits and bank overreach to their lives, there’s hope that consumers is going to be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.