4 Major Banks Start Blocking Cryptocurrency Credit Card Purchases
In a somewhat unsurprising move, four banks offering credit cards services for crypto purchases announce an official position on the future cryptocurrency. The four U.S. Banks: Citigroup, Bank of America, J.P Morgan, Capital One and Discover will no longer facilitate their cardholders in purchasing any bitcoin or altcoins. This news comes in the wake of weeks in a slump for crypto investors, with an unprecedented recession in the market.
The announcement comes amidst Chase, Bank of America and Citi already on course with their crypto ban which was on launch in early February. However, these banks are not the first financial institutions to stop supporting anything about cryptocurrency. Several major banks in the UK like Lloyds, MBNA, Bank of Scotland and Halifax have also suspended cardholders from purchasing crypto.
Most of these banks are claiming that they do not to associate with risks involved with cryptocurrency. That also comes after much speculation with earlier reports indicating banks were reviewing their relationship in supporting the investing of cryptocurrency.
While the bank's recent actions against cryptocurrency might seem far-fetched, the actual reality might have started a while back. A report from the Federal Reserve has reported an increase in credit card debt among the banking population.
While you might think it was the typical holiday shopping, it might have been due to bitcoin purchases. The impulse and speculative buying might represent a significant portion in why these banks saw the urge to stop the credit cards usage.
Additionally, the use of cryptocurrency is facing strict government regulations and the banks promoting such an asset seem like a contradictory move. In the end, the increase in us of cryptocurrency among the population can end up replacing fiat currency. However, they are out to protect the population from imploding on relatively new technology.
Also, banks do not consider bitcoin or any crypto to be an excellent asset to leverage. Much of this lies with the volatility with cryptocurrency rather than have an average demand and supply situation much of the value relies much on speculation and impulse buying. With such an asset the amount can keep fluctuating or eventually turn worthless over time.
Are These The Signs?
While the recent downward spiral is a considerable surprise to many, these are not new with cryptocurrency. In the past, there have been similar trends with traits to such as what we are witnessing now.
However, much of the emotions lie with the assumption that may have led more people to invest, which caused the exponential rise in value. The bank's cancellation might seem like a bad idea at first, but much of it is due to pressure from regulations and saving crypto enthusiasts.
All-in-all, banks might be just out to get cryptocurrency and the blockchain technology. Remember always to take each situation with a pinch of salt. For a long time, banks have downplayed the capabilities of cryptocurrency using volatility and fraud as excuses.
While it might have some truth in it, the capabilities of cryptocurrency especially bitcoin is providing a heated competition to the fiat currency. That might be a step in a similar direction. As of now, the banks seem to be in a winning position, but it is a wait-and-see situation. We don’t know if crypto might bounce back