The news this week is that several banks in the USA and the UK own banned the use of credit cards to purchase ICO News crypto currencies (CC’s). Often the stated reasons are impossible to believe – like aiming to curtail money laundering, gambling, and protecting the full price investor from excessive risk. Interestingly, the banks permits debit card purchases, making it clear that the only problems being protected are their own.
With a credit card you can take chance at a casino, buy guns, drugs, alcohol, pornography, all the things and anything you desire, but some banks and credit card companies choose to prohibit you from using their facilities to purchase crypto currencies? You need to have some believable reasons, and they are NOT the reasons stated.
A single thing that banks are afraid of is how difficult it would be towards confiscate CC holdings when the credit card holder defaults regarding payment. It would be much more difficult than re-possessing a house or perhaps car. A crypto wallet’s private keys can be put at a memory stick or a piece of paper and easily removed from the country, through little or no trace of its whereabouts. There can be a high importance in some crypto wallets, and the credit card debt may never get repaid, leading to a declaration of bankruptcy and a useful loss for the bank. The wallet still contains the crypto currency, and the owner can later access the personalized keys and use a local CC Exchange in a dangerous country to convert and pocket the money. A nefarious eventualitie indeed.
We are certainly not advocating this kind of unlawful behavior, however banks are aware of the possibility and some of them want to shut it all down. This can’t happen with debit cards given that the banks are never out-of-pocket – the money comes out of your membership immediately, and only if there is enough of your money there in the beginning. We struggle to find any honesty in the bank’s scenario about curtailing gambling and risk taking. It’s appealing that Canadian banks are not jumping on this bandwagon, potentially realizing that the stated reasons for doing so are bogus. The exact fallout from these actions is that investors and persons now aware that credit card companies and banks really do have the ability to confine what you can purchase with their credit card. This is not how they advertise most of their cards, and it is likely a surprise to most users, who are extremely used to deciding for themselves what they will purchase, especially right from CC Exchanges and all the other merchants who have established Credit card merchant Agreements with these banks. The Exchanges have done nothing bad – neither have you – but fear and hpye in the banking industry is causing strange things to arise. This further illustrates the degree to which the banking industry comes across as being threatened by Crypto Currencies.