Bank of america becomes the latest credit cardissuer to ban bitcoin
The company says that its approach to cryptocurrency transactions has not changed. Incidents like this pose several challenges for the cryptocurrency industry short-term, but also show just how scared the incumbents really are. Currently, if you want to buy bitcoin, ethereum or any other alt-coin instantly, the only option is to use your debit or credit card.
Transferring funds from your bank has lower fees, but takes several days. Coinbase has long accepted debit and credit cards for instant buys, however, passing on to the buyer the standard 4 percent credit card transaction fee.
Now, it seems VISA issuers and Mastercard have quietly reclassified the way Coinbase credit card purchases are processed on their networks.
Even worse is that cash advances do not fall under the standard interest-free bank of america becomes the latest credit cardissuer to ban bitcoin period that consumers expect for other credit card purchases. The moment the Coinbase purchase goes through, the transaction accrues and compounds daily.
For most people, losing 10 percent of your investment in fees means that the practice of using a credit card to buy cryptocurrency is effectively over. It will become more difficult for investors to purchase bitcoin and other cryptocurrency on their terms. Transferring funds via ACH takes three to five business days. In a world where cryptocurrency prices can swing wildly in either direction, a week feels like a nail-biting bank of america becomes the latest credit cardissuer to ban bitcoin.
This provides a consistent view of such purchases for both merchants and issuers. If anything, this change makes things more complicated in the short term. By reclassifying Coinbase and presumably all other exchanges, as wellVISA and Mastercard are doing their best to make it harder, slower and more expensive for people to bank of america becomes the latest credit cardissuer to ban bitcoin in cryptocurrency. The rise of bitcoin and future cryptocurrency is tied to the eventual fall of financial middlemen like VISA and Mastercard.
Maybe they just woke up to it. Acquirers and merchants are responsible for ensuring that all Visa transactions are properly coded in the Visa payment system, so that issuers can rely on accurate and consistent coding when making authorization decisions. These codes have been in place for some time.
Justin Mauldin is the founder of Salient PR and an investor in cryptocurrency. More posts by this contributor The Bank Of Facebook.
Nevertheless, the climate is very much one of mistrust, caution and self-preservation, in keeping with the bank of america becomes the latest credit cardissuer to ban bitcoin nature of these age-old institutions. If bitcoin is to prosper, it will need to do so without the support of many of the financial organizations that are capable of providing an onramp to the world of decentralized currencies.
As of Friday February 2, Bank of America has stopped accepting credit card transactions from cryptocurrency exchanges.
While debit cards are believed to be unaffected, customers of exchanges such as Coinbase will no longer be able to purchase crypto with credit card. Thusthe decision made by Bank of America and Citigroup, which also announced it would be following suit on Friday, is defensible from a business perspective. These companies are trying to protect themselves against customers recklessly borrowing to buy bitcoin and then finding themselves unable to pay off their debts should the cryptocurrency plummet in price, as has proven to be the case.
The news follows in the wake of a Europe-wide crackdown on crypto debit cards, orchestrated by a Visa subsidiary, and comes amidst a climate of increased regulatory pressure on cryptocurrencies as a whole. The move has been interpreted as a desire on behalf of Bittrex to free itself from the increasingly tainted brand of Tether.
At present Bittrex, together with fellow U. In light of the news that U. In what may be a dig at Bitfinex, whose ever-changing and ever-opaque banking provisions are well-documented, Cryptopia added: Banks know all about bitcoin now but the vast majority want nothing to do with it.
Do you think Bank of America and Citigroup bank of america becomes the latest credit cardissuer to ban bitcoin opposed to bitcoin or are they simply trying to protect their customers from getting into debt? Let us know in the comments section below. I am a robot. I just upvoted you!
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