What is the news this week is that several banks in north america and the UK have banned the use of credit cards to purchase crypto currencies (CC’s). The stated reasons Equipment are impossible to trust : like trying to curtail money laundering, gaming, and protecting the retail investor from excessive risk. Interestingly, the banks will allow debit card purchases, making it clear that the only risks being protected are their own.
With a credit card you can gamble at a casino, buy guns, drugs, alcohol, pornography, everything and what you desire, but some banks and creditors want to prohibit you from using their facilities to purchase crypto currencies? The converter should have some believable reasons, and they are NOT the reasons stated.
One thing that banks that terrifies them is how difficult it would be to confiscate CC holdings when the credit card holder defaults on payment. It would be much more difficult than re-possessing a house or a car. A crypto wallet’s private keys can be put on a memory stick or a piece of paper and easily taken from the country, with little track of its whereabouts. There may be a high value in some crypto accessories, and the credit card debt may never be paid, leading to a announcement of bankruptcy and a significant loss for the bank. The wallet still provides 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 are certainly not advocating this kind of against the law behavior, but the banks are aware of the opportunity and some of them want to sealed it down. This can’t happen with debit cards as the banks should never be out-of-pocket : the money comes from the account immediately, and only if there is enough of your money there in the first place. We struggle to find any dependability in the bank’s story about curtailing gaming 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 consumers are now aware that creditors and banks really do have the ability to restrict what you can purchase with their credit card. This is not how they advertise their cards, and it is likely a surprise to most users, who are quite used to deciding for themselves what they will purchase, especially from CC Deals and all the other merchants who have established Merchant Agreements with your banks. The Deals have done nothing wrong : neither have you : but fear and hpye in the banking industry is causing strange things to happen. This further shows the amount to that your banking industry feels insecure by Crypto Currencies.
At this point there is little cooperation, trust, or understanding between the fiat money world and the CC world. The CC world has no central controlling body where regulations can be implemented across the board, and that leaves each country around the world trying to figure out what to do. China has decided to ban CC’s, Singapore and Japan embrace them, and many other countries are still marring their heads. What they have in accordance is that they want to collect taxes on CC investment profits. This is not too unlike the early days of digital music, with the internet aiding the unfettered proliferation and distribution of unlicensed music. Digital music licensing schemes were eventually developed and accepted, as audience members were OK with paying a little for 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 future of fiat and digital currencies? As people around the world get more fed up with outrageous bank profits and bank overreach into their lives, there is hope that consumers will be regarded with respect and not be forever saddled with high costs and unwarranted rules.