NEWS - Bank of America Becomes the Latest Credit Card-Issuer to Ban Bitcoin
"Bank of America, the country’s second largest bank, is the latest player to give bitcoin the thumbs down"
"As of Friday February 2, the Bank of America has stopped accepting credit card transactions from cryptocurrency exchanges."
They join JP Morgan Chase and Citigroup in shutting down cryptocurrency purchases made with their credit card.
"customers of exchanges such as Coinbase will no longer be able to purchase crypto with a credit card."
"so far debit cards are believed to be unaffected"
More and more traditional banks are pushing back against cryptocurrency.
The Regulators are putting pressure on the Banks to shut down the on ramp for moving fiat money onto the unregulated internet freeway.
"The news follows in the wake of a Europe-wide crackdown on crypto debit cards, orchestrated by a Visa subsidiary"
It comes at a time of increased regulatory pressure on cryptocurrencies as a whole.
This is a major power play by the banks. There are plenty of people who aren't willing to link up their bank accounts for fear of not knowing if it's safe. I personally used a credit card for my first purchases, but I pay them in full every month. It was a security thing more then anything.
very wise approach. too many people bought big with credit planning to make it big and payoff the debt and still be up big time.
the parties over and now a lot of people are left with a bad case of the hangovers.
I think, as an ex-banker that part of the banks reluctance is about people who buy today with their credit card and when the market crashes the next day some of those people come back and want to cancel the credit card buy and get their money back - it creates a really big mess for the banks to clean up.
I get the issue the bank faces with requests to cancel transactions. Society as whole doesn't take responsibility for their actions and thinks someone should bail their butts out each time they make a mistake. The move towards considering it a cash advance that many banks in the US just took recently actually protects them almost completely. Undoing a cash advance isn't nearly as easy as undoing a purchase.
Either way I don't think the banks like all the money that was sitting in their account leaving towards crypto. Every $1 that leaves the banking systems adds liquidity issues for them. There are plenty of us that have pulled substantial sums from money markets and savings accounts.
When a few people pull say $1000-$5000 it doesn't matter, but when tens of thousands of them pull $1000-$5000 it starts to create issues. As an ex-banker I'm sure you grasp the position the banks are in when cash keeps flowing out the door vs in.
excellent point about the liquidity issue, a slow but steady 'run on the bank' as money flows out to crypto exchanges and beyond. The banks still allow the use of debit cards so they haven't stemmed the flow completely - yet - though I think they will still try new ways to cut the flow.
for now the blunt force scare tactics are working, people are bailing out and the price / value of the currencies drop and more people bail out. once prices find a new more solid higher low than last time the process of new money going into cryptos will again exceed the outflow and price / values will again resume their upward movement again attracting in more and more people looking for the quick road to wealth again.
Who cares if they stop credit card use, debit cards work just fine. If you use a credit card on crypto currency then you deserve to lose money when you can't pay credit card back. Borrowing money to buy coins = bad idea
thanks for the comments @trinityandgrow. for those who are buying bitcoin to use as a currency then this is only an inconvenience, because yes, they can still use debit cards. and yes, borrowing to buy bitcoin or tulip bulbs is speculating and is a bad idea.
a question for you though, if you are a cryptocurrency investor and the supply of new purchases is restricted, will it slow the rebound of cyrpto-coin prices? and will more bad news like this push prices down further and push some investors to cash in and cash out?
Banks are getting more and more scared of crypto which is really good in my opinion.
how so @zemiatin?
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