The news this week is that several banks in the USA and the UK have banned the utilization of charge cards to purchase crypto currencies (CC’s). The stated reasons are impossible to think – 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 can gamble at a casino, buy guns, drugs, alcohol, pornography, everything and anything you desire, but some banks and charge card companies wish to prohibit you from employing their facilities to purchase crypto currencies? There should be some believable reasons, and they are NOT the reasons stated.
A very important factor that banks are scared of is how difficult it would be to confiscate CC holdings when the charge 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 off the united states, with little or no trace of its whereabouts. There can be quite a high value in some crypto wallets, and the charge card debt may never be repaid, leading to a declaration of bankruptcy and a substantial loss for the bank. The wallet still offers the crypto currency, and the dog 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 type of unlawful behavior, however the banks are alert to the likelihood and many of them wish to shut it down. This can’t happen with debit cards because the banks are never out-of-pocket – the 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 aren’t 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 people are now conscious that charge card companies and banks really do have the ability to restrict what you can aquire using their credit card. This isn’t how they advertise their cards, and it is likely a shock to most users, who’re quite used to deciding for themselves what they’ll purchase, especially from CC Exchanges and the rest of the merchants who’ve established Merchant Agreements with your banks. The Exchanges have inked nothing wrong – neither have you – but fear and greed in the banking industry is causing strange items to happen. This further illustrates the degree to that the banking industry feels threatened by Crypto Currencies. IEO Launchpad
Now there’s little cooperation, trust, or understanding between the fiat money world and the CC world. The CC world doesn’t have central controlling body where regulations can be implemented across 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 continue to be scratching their heads. What they’ve in common is that they would like to collect taxes on CC investment profits. This isn’t too unlike the first 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 a little 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 ongoing future of fiat and digital currencies? As people all over the world have more frustrated with outrageous bank profits and bank overreach to their lives, there’s hope that consumers will soon be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.