This week there was news that several banks in the U.S. and The United Kingdom have banned the use of credit cards to buy cryptocurrency (CC). These reasons are impossible to believe – for example, attempts to stop money laundering, gambling and protect a private investor from excessive risk. Interestingly, banks will allow the purchase of pins, making it clear that the only protected risks are their own.
With a credit card you can gamble in casinos, buy guns, drugs, alcohol, pornography, whatever you want, but some banks and credit companies do. Prohibit you from using your funds to buy cryptocurrencies? There must be good reasons, and they are NOT given.
Banks fear difficulties in obtaining ownership of CC if the credit card holder fails to meet its obligations. It would be much harder than having a house or a car again. Closed crypto wallet keys can be placed on a USB drive or a piece of paper and easily taken out of the country, with little or no location. Some crypto wallets may be high value, and credit card debt may never be repaid, leading to bankruptcy and significant losses for the bank. The wallet still contains cryptocurrency, and the owner can later access the closed keys and use the local CC exchange abroad to convert and deposit the money. Indeed, a nefarious scenario.
Of course, we do not support this type of illegal behavior, but banks are aware of it, and some want to close it. This cannot happen with debit cards, because banks always have resources – the money will come directly from your account and only if there is enough money to start. It is difficult for us to find fairness in the bank’s discourse about restricting gambling and taking risks. It is interesting to note that Canadian banks do not jump on this trolley, perhaps because they understand that the reasons given for this are wrong.
The consequences of these actions are that investors and consumers now know that credit card companies and banks do have the ability to limit what you can buy with their credit card. They advertise their cards wrong, and it probably surprises most users who are used to deciding for themselves what to buy, especially with CC Exchanges and any other seller who has trade deals with these banks. The exchanges have done nothing wrong, just like you, but the fear and greed in the banking industry cause strange things. This once again demonstrates how much the banking industry feels threatened by cryptocurrencies.
Currently, there is no cooperation, trust or understanding between the world of fiat money and the CC world. There is no central control body in the CC world where rules can be enforced at all levels, which means that every country in the world must try to determine what to do. China has decided to ban CC, Singapore and Japan accept them, and many other countries are still scratching their heads. What unites them is that they want to collect taxes on the profits from investments in CC. This is very similar to the early days of digital music, when the Internet allowed the unbridled spread and spread of unlicensed music. In the end, digital music licensing systems were developed and adopted, as listeners agreed to pay for their music rather than endless piracy, and the music industry (artists, producers, record companies) accepted a reasonable license fee instead of anything. Is there a trade-off in the future of fiat and digital currencies? As people around the world get tired of excessive bank profits and bank overdrafts in their lives, it is hoped that consumers will be treated with respect and will not ever face high costs and unreasonable restrictions.