The headlines this week is that several banks in the USA and the UK have banned the use of bank cards to buy crypto currencies (CC's). The stated reasons are impossible to trust - like trying to curtail money laundering, gambling, and protecting the retail investor from excessive risk. Interestingly, the banks enables bank card purchases, making it clear that the only real risks being protected are their own.
With a bank card you are able to gamble at a casino, buy guns, drugs, alcohol, pornography, everything and anything you desire, but some banks and charge card companies desire to prohibit you from using their facilities to buy crypto currencies? There should be some believable reasons, and they're NOT the reason why stated.
One thing that banks are afraid of is how difficult it should be to confiscate CC holdings when the charge card holder defaults on payment. It'd be more difficult than re-possessing a house or even a car. A crypto wallet's private keys may be placed on a memory stick or a bit of paper and easily taken off the nation, with minimum trace of its whereabouts. There can be quite a high value in a few crypto wallets, and the charge card debt may never be repaid, ultimately causing a declaration of bankruptcy and an important loss for the bank. The wallet still provides the crypto currency, and the owner can later access the private keys and make use of a local CC Exchange in a foreign country to convert and pocket the money. A nefarious scenario indeed.
We're certainly not advocating this type of unlawful behavior, however the banks are aware of the chance and a number of them desire to shut it down. This can't happen with debit cards because the banks are never out-of-pocket - the money comes from the account immediately, and only if you have enough of your cash there to begin with crypto game. We struggle to get 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 might be bogus. The fallout from these actions is that investors and individuals are now aware that charge card companies and banks really do have the ability to restrict what you can get using their credit card. This isn't how they advertise their cards, and it is probable a surprise to many users, who're quite used to deciding for themselves what they'll purchase, especially from CC Exchanges and the rest of the merchants who've established Merchant Agreements with your banks. The Exchanges did nothing wrong - neither perhaps you have - but fear and greed in the banking industry is causing strange items to happen. This further illustrates the amount to that your banking industry feels threatened by Crypto Currencies.
Now there's little cooperation, trust, or understanding involving the fiat money world and the CC world. The CC world doesn't have central controlling body where regulations may be implemented throughout 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 number of other countries are still scratching their heads. What they've in keeping is that they want to collect taxes on CC investment profits. This isn't too unlike early days of digital music, with the net 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 something for 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 continuing future of fiat and digital currencies? As people all over the world get more completely fed up with outrageous bank profits and bank overreach into their lives, there's hope that consumers is going to be regarded with respect and not be forever saddled with high costs and unwarranted restrictions.
Crypto Currencies and Blockchain technology boost the pressure around the world to make a reasonable compromise happen - - this can be a game changer.