A lot of FUD has been hitting the cryptocurrency market over the course of the last month. One of the most recent news is banks blocking off their customers from using their credit cards to buy cryptocurrencies. Coinbase can confirm.
Whats going on with banks and cryptocurrencies?
Over the course of about the last weeks, a lot of banks have started issuing bans on cryptocurrencies being purchased with their credit cards.
Bank of America, JPMorgan Chase & Co., and Citigroup Inc. have stated that they will be taking such measure in order to lessen the credit risks tied to the crypto markets high levels of volatility.
It’s really just a classic case of a lender being left on the hook when a borrower cannot repay. And the chances of that happening in the cryptomarket are quite high. Imagine how many people bought bitcoin using their credit cards over a month ago when it was at its all-time high of near $20,000?
And with the bitcoin now costing a little over $8,200, and if you add uncertainty to the mix, this spells out some serious problems for banks. They are simply trying to protect their interests and prevent card users from defaulting in the future.
More banks join in on the ban.
In just the last few days, Lloyds Banking group, the biggest bank in the United Kingdom issued a ban on crypto credit card purchases. The ban, as put by Lloyds is meant to protect customers from volatility and potentially devastating losses.
Virgin Money, based in the UK, South Africa, and Australia has also limited its customers.
What does this mean for crypto freedom?
Some people might assume that banks blocking off cryptocurrency purchases with credit cards as a horrible thing for the industry as a whole. However, that’s not true at all. In fact, it’s a rational approaching to bringing security to a highly volatile market.
After all, when you use a bank’s credit card, you are using their money. By all means, you can still use your debit card to purchase cryptocurrencies. Nobody is limiting your freedoms.
The post Banks banning cryptocurrency purchases with credit cards is not a bad thing. appeared first on cryptona.