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Why did American banks prohibit buying cryptocurrency with credit cards?


The US banks have banned buying cryptocurrency with their credit cards. As informs Bloomberg, restrictive measures were accepted by all banks of “the big four”: JPMorgan Chase, Bank of America, Citigroup and Wells Fargo.
“By prohibiting the purchase of cryptocurrency, the bank will continue to study the issue as the market develops,” said Wells Fargo representative Shelley Miller in an email. Previously, representatives of banks explained that the purchase of cryptos with credit cards carries high credit risks, including for the banks themselves.
Denis Smirnov, a blockchain consultant, and researcher of cryptocurrency is discussing the possible reasons for the ban:
Denis Smirnov, a consultant, and researcher in cryptocurrency. “I think, first of all, banks protect themselves from non-repayment of loans because the cryptocurrency is quite volatile. Despite the fact that most of them grew in price in 2017, we are in the correction in 2018, therefore, those clients of the bank who used borrowed funds, including credit cards, to buy cryptocurrencies, can possibly not repay a loan or even make a minimum monthly payment. Of course, banks do not like it. I think this is the main reason. The second reason, less important, perhaps, is the use of credit cards to get miles or cashback. Credit cards in this case usually do not give cashback or do not give any points of loyalty programs. In the case of cryptocurrency, perhaps this was not the case, and bank customers used it to get bonuses where banks did not want to. ”
In this case, according to experts, there are no methods of supervising such operations and prohibitive measures can be circumvented.
The decision of the “big four” is unlikely to seriously affect the market of cryptocurrency, said the president of the company “Moscow Partners” Eugene Kogan:
Evgeny Kogan Managing Director of the Moscow Partners Company “I do not think that this news will somehow affect the value of the cryptocurrency. It’s no secret that the state and all major financial institutions, small and large, declared war on the crypto simply because it is a form of competition, and the state and large financial institutions do not like competitors. Therefore, to expect that they will enthusiastically resolve with their cards to pay for the crypto, it would probably be surprising. Three or four months ago, when bitcoin was 20 thousand dollars, I wrote that the main risk is the regulators and actions of the authorities. The way it is. I think that others will follow these guys. ”
On Monday, June 11, the bitcoin rate fell below $ 7,000 after reports of a crack in the South Korean crypto exchange. Also, information was expressed that US regulators demanded from the crypto exchange markets data on the course of trading because of possible manipulation in the bitcoin futures market.

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