The news headlines this week is that several banks in the USA and the UK have banned the usage of charge cards to get crypto currencies (CC’s). The stated reasons are impossible to trust – like wanting to curtail money laundering, gambling, and protecting the retail investor from excessive risk. Interestingly, the banks will allow bank card purchases, rendering it clear that the only risks being protected are their own.
With a charge card you can gamble at a casino, buy guns, drugs, alcohol, pornography, everything and anything you would like, but some banks and bank card companies desire to prohibit you from using their facilities to get crypto currencies? There should be some believable reasons, and they’re NOT the reasons stated.
Something that banks are frightened of is how difficult it is always to confiscate CC holdings when the bank card holder defaults on payment. It’d become more difficult than re-possessing a home or perhaps a car. A crypto wallet’s private keys can be placed on a memory stick or a piece of paper and easily taken from the nation, with little if any trace of its whereabouts. There can be quite a high value in a few crypto wallets, and the bank card debt may never be repaid, ultimately causing a declaration of bankruptcy and a substantial loss for the bank. The wallet still provides the crypto currency, and the owner can later nft tokens for sale access the private keys and work with a local CC Exchange in a foreign country to convert and pocket the money. A nefarious scenario indeed.
We are certainly not advocating this type of unlawful behavior, nevertheless the banks are aware of 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 amount of money comes out of your account immediately, and only when there is enough of your hard earned money there to begin with. We struggle to locate any honesty in the bank’s story about curtailing gambling and risk taking. It’s interesting that Canadian banks are not jumping with this bandwagon, perhaps realizing that the stated reasons for doing so are bogus. The fallout from these actions is that investors and individuals are now conscious that bank card companies and banks do have the capability to restrict what you can purchase with their credit card. This is simply not how they advertise their cards, and it is likely a shock to many users, that are quite used to deciding for themselves what they’ll purchase, especially from CC Exchanges and all the other merchants who’ve established Merchant Agreements with your banks. The Exchanges have done nothing wrong – neither perhaps you have – but fear and greed in the banking industry is causing strange what to happen. This further illustrates the amount to that the banking industry feels threatened by Crypto Currencies.
Now there is little cooperation, trust, or understanding between the fiat money world and the CC world. The CC world has no central controlling body where regulations can be implemented across the board, and that leaves each country all over the world trying to find out what to do. China has made a decision to ban CC’s, Singapore and Japan embrace them, and a great many other countries remain scratching their heads. What they have in accordance is that they want to collect taxes on CC investment profits. This is simply not too unlike early days of digital music, with the internet 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 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 ongoing future of fiat and digital currencies? As people all over the world get more frustrated with outrageous bank profits and bank overreach within their lives, there is hope that consumers is going to be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.