Over the past few months, financial organizations and governments across the world have been attempting to crack down on cryptocurrencies. Users who want to purchase, trade or sell digital currencies are being looked down upon by those entities, and are constantly under scrutiny and on the lookout for regulations that make it harder and harder to invest. Another big news has made noise in the cryptocurrency space, as four large banks have announced that they will ban purchases with credit cards.
U.S. Bank, J.P. Morgan Chase, Citigroup, and Bank of America have reportedly been banning cryptocurrency purchases for its customers. Policies have recently been changed and this new restriction has been reported by CNBC. According to the news website, a spokesperson from J.P. Morgan has declared: “At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved. We will review the issue as the market evolves.”
It is still unclear what each bank’s policies are concerning purchasing virtual currencies with credit cards and it looks like a temporary situation rather than a permanent ban. After the bullish run of bitcoin in December 2017 and the extreme downfall that occurred this past week, banks are trying to limit the risks for their customers. For these banks, allowing purchases of such volatile assets with credit cards is like lending money to customers to go gamble at the casino or participate in the lottery.
It will be interesting to see what these banks and other financial organizations do in the future in regards to the trading of coins and tokens. Customers want to have total control of their assets and want to have the freedom of investing in digital currencies. However, it is rather a scary thought for banks as they want to “control” their customers and manage funds. This is exactly why these digital currencies now exist and were created in the first place. In 2009, Satoshi Nakamoto created Bitcoin and was hoping for a decentralized new currency, that wouldn’t be controlled by banks or governments. As more and more regulations arise each day, one can wonder: will this model be viable in the near future?
TLDR: Four major American banks have come out against purchasing cryptocurrencies with credit cards and has banned its customers from doing so. A spokesperson from J.P. Morgan has claimed that this was due to the volatility and the risk involved with digital currencies.