Wells Fargo Bans Customers from Buying Cryptocurrency with Credit Cards
In a recent report from Fortune, one of the biggest names in the banking sector, Wells Fargo, is said to join the other financial institutes in order to raise a ban against the usage of cryptocurrency.
What does the report say?
Wells Forgo is considered as the third largest bank in the United States with almost $2 trillion of the total asset, as per 2018.
According to Fortune, Wells Fargo has raised a stern ban on their customers to not use the credit cards issued by the bank, for any transactions made with respect to cryptocurrency.
In case if you do try to make a transaction in order to buy or exchange cryptocurrencies, the credit card transaction would just be declined on any platform (cryptocurrency exchanges or brokerage platforms, etc.).
One of the spokespeople of the bank made a statement on the 11th, saying, “Customers can no longer use their Wells Fargo credit cards to purchase cryptocurrency. We’re doing this in order to be consistent across the Wells Fargo enterprise due to the multiple risks associated with this volatile investment. This decision is in line with the overall industry.”
He later added on saying, “We will continue to evaluate the issue as the market evolves.”
Why was this done?
The other banks which had raised a ban against the transactions made with regard to cryptocurrencies earlier, are – BOA (Bank of America), JPMorgan, Citigroup, etc.
This, therefore, meant that the customers belonging to the 4 best as well as largest banks in the United States, should now look for other banks with better prospects of allowing transactions to be made via credit cards for the purchase of cryptocurrencies.
Also, few credit processors such as MasterCard, Visa, etc. have begun to charge the customers, a certain amount of extra cash fees on the purchases of these cryptocurrencies.
All this was probably done because, Cryptocurrencies can be used illegally for various activities like gambling, trading, etc. Hence, this has led the crypto world to be being framed as an insecure platform by many.
As the spokesperson had mentioned, the banks, like many other banks, would just want to avoid any sort of risk involved by linking with Crypto.
Another reason could be for the underlying statistics against the purchases of cryptocurrencies made by credit cards. They are as follows.
- Student Loan Market-place, LendEDU, conducted a survey in January 2018 and found out that 18% of the investors purchased crypto using their credit cards but 1/5th of them carried on their balances and failed to pay back.
- Another follow up report found out that 21% of University’s students invested in Bitcoins or other cryptocurrencies, which were initially not dischargeable in bankruptcy.
- In 2017, Wells Fargo had cut off the banking services for cryptocurrency exchange Bitfinex as well.
Thus with all the pros and cons of cryptocurrency, one could only wait to find out if it’s for the better or for the worse.