Citigroup, Bank of America Reconsidering Cryptocurrency Policies

While there’s plenty of interest in buying cryptocurrencies these days, some bank customers have found that their banks aren’t always amenable to the notion. In fact, just a couple weeks ago, Capital One Financial declared that customers would no longer be allowed to buy cryptocurrency with credit cards. Bank of America and Citigroup may follow suit in the weeks ahead, as right now, such purchases are permitted, but may not be much longer.

A surprisingly large number of major banks actually forbid their own customers from making cryptocurrency purchases, including not only the aforementioned banks, but also Discover Financial Services—which has forbidden such practices since 2015—and TD Bank, who isn’t processing “some” bitcoin transactions due to currently-active security measures.

Issues of potential criminality seem to be the biggest problem, with banks nervous about potential money laundering efforts. Even Visa had shut down its relationship with WaveCrest recently; reports noted that WaveCrest, a cryptocurrency-based card, was required to close all Visa card accounts, which left users with a string of declined transactions and concerns about getting their money. Though WaveCrest was licensed as an E-Money Institution, and thus subject to certain regulations about keeping funds safe, this appeared to cut zero ice with Visa.

On the one hand, some might say that this is just caution, even if potentially an excess of same. Telling customers that they’re “not allowed” to buy bitcoin or any other coin with their own money is a catastrophically childish approach to the matter, and the kind of thing that might send customers to smaller institutions who don’t believe they can treat paying customers like wayward toddlers. On the other hand, it would make sense for a business with a vested interest in dealing in government-issued currency to not allow customers to deal in potentially-competing issues.

Whether these companies are frightened of liability, don’t understand the issues, or just want to keep competitors out of their market, the end result remains the same: cryptocurrency may be tough to come by in the days ahead.