The headlines this week is that several banks in the USA and the UK have banned the use of credit 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 allows debit card purchases, rendering 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 anything you wish, but some banks and bank card companies desire to prohibit you from using their facilities to purchase crypto currencies? There should be some believable reasons, and they’re NOT the causes stated.
A very important factor that banks are afraid of is how difficult it would be to confiscate CC holdings once the bank card holder defaults on payment. It would be more difficult than re-possessing a home or perhaps a car. A crypto wallet’s private keys may be placed on a memory stick or a bit of paper and easily taken off the country, with little if any trace of its whereabouts. bsc airdrops There could be a high value in some crypto wallets, and the bank 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 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 unlawful behavior, however the banks are alert to the chance and a number of them desire to shut it down. This can’t happen with debit cards whilst the banks are never out-of-pocket – the cash comes out of your account immediately, and only if you have enough of your cash there to start with. We struggle to get 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 might be bogus. The fallout from these actions is that investors and people are now aware that bank card companies and banks do have the capability to restrict what you can get using their credit card. This is simply not how they advertise their cards, and it is probable a shock to most users, who’re quite used to deciding for themselves what they’ll 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 have you – but fear and greed in the banking industry is causing strange items to happen. This further illustrates their education to which the 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 may be implemented across the board, and that leaves each country around the globe trying to find out things to do. China has decided to ban CC’s, Singapore and Japan embrace them, and a number of other countries continue to be 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 a little 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 future of fiat and digital currencies? As people around the globe have more completely fed up with outrageous bank profits and bank overreach within their lives, there’s hope that consumers is likely to be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.