J.P. Morgan Chase, Citigroup, and Bank of America customers were informed February 3, 3018 that they will no longer be able to purchase cryptocurrencies using their credit cards. This is a major development in the cryptocurrency space as many individuals were taking out debt on high percentage credit cards to purchase cryptocurrencies.
A Reversal of Policy
This comes as a complete reversal of policy for J.P. Morgan Chase, Citigroup, and Bank of America. January 25, 2018, J.P. Morgan Chase had confirmed they were reevaluating their policy allowing credit cards to purchase cryptocurrencies online. Although unfortunate for those wanting to purchase crypto on their credit card, this clearly is beneficial to the population. The concept of purchasing crypto on a credit card is like buying someone’s dollars off them using your credit card.
Although it had been allowed for years, which is why the reversal of policy is newsworthy, this should have been corrected long ago. It is unhealthy for the crypto markets, investors, gamblers, and individuals to be able to use credit cards to purchase cryptocurrencies. It should be noted that you can still do ACH bank transfers, wire transfers, and many other means to purchase crypto through the same banks. These three banks did not take a stance against crypto as some may presume as they are still allowing the purchase through your bank account. Instead, they are trying to protect the consumer from themselves and market volatility.
J.P. Morgan CEO Jamie Dimon once professed Bitcoin a “fraud” and threatened to fire any employee invested in the cryptocurrency. His stance has shifted dramatically with his January 24, 2018, interview claiming he was no longer a skeptic. It is evident the threat big banks face from cryptocurrencies as their purpose was to bring down the centralized banking system. However, over the last ten years, it has become obvious that bitcoin and cryptocurrencies are the way of the future and banks need to begin integrating blockchain to stay relevant. The change in policy today was not big banks trying to cripple crypto but was their attempt at protecting consumers from themselves.
If you were trying to purchase thousands of dollars of cryptocurrencies on credit cards for any other reasons besides points you were most likely digging yourself a debt-laden hole. The King presumes these banks watched many individual’s credit card debts mount in the prior two months with staples like Coinbase receiving an overwhelming percentage of the transactions. They saw the risks mounting of individuals not being able to pay their cards with the collapse this past month of the price of bitcoin and decided to take a very reasonable stance. Had they banned the purchase of cryptocurrencies outright it would have been a different situation. Solely not allowing individuals to buy crypto on credit cards is actually a very reasonable stance, as the alternative means to purchase remain and are facilitated by the same banks.
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