Three of the most important banks in the United States have decided to ban cryptocurrency purchases on credit cards. The banks are JP Morgan Chase, Bank of America and Citigroup. These important banks expressed that they do not want the credit risk associated with the transaction. Mary Jane, JP Morgan representative was talking with Bloomberg to explain the situation.
Cryptocurrency Purchases Banned on Credit Cards
Mary Jane has commented in an interview with Bloomberg that JP Morgan Chase does not want to take any risk regarding cryptocurrency transactions. That’s why Coinbase, one of the most important cryptocurrency platforms has recommended its users about the situation.
The message sent by Coinbase reads as follows:
“The MCC code for digital currency purchase was changed by a number of major credit card networks. The new code will allow banks and card issuers to charge additional fees.”
The ban is not affecting cryptocurrency purchases via ATMs or debit cards. Customers with credit cards will be hardly affected by this measure. This is not something that will hit hard the cryptocurrency market. Smaller investors will be affected the most by this ban.
Lenders could be compromised in a difficult situation if the customer can’t repay the cryptocurrency purchase. Furthermore, it is important to remark that lenders need to have a tight control in compliance with Anti Money Laundering policies. And that’s something that sometimes is difficult to accomplish.
This set of new regulations may not help to revert the trend of the cryptocurrency market. On February the 2nd, Bitcoin reached levels not seen since November falling under $8,000 dollars. Other regulations have been influencing the price to drop. India was expected to ban cryptocurrencies, Facebook has banned ICO and Cryptocurrency announcement on its platform and Tether and Bitfinex have been subpoenaed.
At the moment of writing this article, Bitcoin seems to recover part of its price lost during the last days. At the moment is being traded around $9,000 dollars depending on the exchange.
Mastercard Inc said that during 2017, cross-border volumes on its network have risen 22 percent. The main reason was to buy digital currencies. Since the price started to drop since last December, the trend has beginning to slow down.
It will be important to follow the regulations that will appear in the coming days. The market needs buyers in order to push the prices up. A topic that is important to follow is Tether and its funds and the investigation of the CFTC.
Image Courtesy of Pixabay
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Tags:Bank of AmericaBitcoin Credit Card PurchasesBitcoin PurchasesCredit CardsCredit Cards PurchasesCryptocurrency PurchasesJP MorganJP Morgan ChaseMaster CardMastercardvisa