The news this week is that several banks in the United States and the United Kingdom have banned the use of credit cards for buying cryptocurrencies (CCs). The reasons described are impossible to believe – such as trying to reduce money laundering, gambling and protecting retail investors from additional risks. Interestingly, banks will allow debit card purchases, making it clear that only the risks are their own to secure.
With credit cards you can gamble at casinos, buy guns, drugs, alcohol, pornography, everything and everything you like, but some banks and credit card companies want to ban you from using their facilities to buy cryptocurrencies? There must be some credible reasons, and they are not the reasons given.
What banks fear is how difficult it is to forfeit CC holdings when credit cardholders default on payments. Re-owning a house or car will be much more difficult than right. The private keys of a crypto wallet can be attached to a memory stick or a piece of paper and no trace of it can be easily found. Is a significant loss. The wallet still contains crypto currency, and the owner can then access the private keys and transfer money and pocket using a local CC exchange abroad. Really a sad scene.
We are certainly not advocating this kind of illegal behavior, but the banks are aware of the possibility and some of them want to stop it. Banks are never out of pocket – this cannot happen with debit cards – money instantly flows out of your account, and only if you start making a lot of money there. We struggle to find any honesty in the bank’s story about reducing gambling and taking risks. It is interesting to note that Canadian banks do not jump into this bandwagon, perhaps realizing that the reasons given for doing so are bogus. As a result of these actions, investors and consumers are now aware that credit card companies and banks really have the power to limit what you can buy with their credit cards. This is not an advertisement for their cards, and it is probably a surprise to most users, who are quite accustomed to deciding for themselves what to buy, especially from CC Exchange and all the other merchants who have merchant agreements with these banks. The exchanges have done nothing wrong – neither have you – but fear and greed cause strange things in the banking industry. This further illustrates the perception that the banking industry is threatened by cryptocurrencies.
There is little collaboration, trust or understanding between Fiat Money World and CC World at the moment. CC is not a central regulatory body in the world where regulations can be enforced across the board and it seeks to figure out what every country in the world needs to do. China has decided to ban CCs, Singapore and Japan have embraced them and many more countries are still scratching their heads. The similarity between them is that they want to levy tax on the profit of CC investment. Not too different from the early days of digital music, the Internet helped in the uninterrupted promotion and distribution of unlicensed music. Digital music licensing schemes were eventually developed and recognized, as listeners were justified in paying some money for their music instead of endless pirating, and the music industry (artists, producers, record companies) was fine with nothing but reasonable license fees. Could there be any compromise in the future of Fiat and digital currency? As people around the world become more and more tired of the profitable bank profits and the publicity of the bank in their lives, there is hope that consumers will be treated with respect and not forever cut high costs and unregulated restrictions.
Cryptocurrency and blockchain technology increase the pressure on the world to make a reasonable compromise – it is a game changer.