This Monday, Wells Fargo, the third largest bank in the USA, joined the growing group of banks and financial institutions that are outlawing crypto payments with their credit cards.
Judging by the current list of participants in this ban, it seems that all of the financial industry’s heavy hitters are involved, including, but not limited to: JP Morgan, Citi Bank, and Capital One.
The leadership at Wells Fargo has released statements justifying this course of action, which essentially give the impression that the decision was made after a careful evaluation of the current risks that can be associated with Cryptocurrency payments and Cryptocurrency investing.
This included the central point that their decision fits with what the majority of the banking industry has done so far. The existing list of banks and financial firms that have banned Cryptocurrencies seems to support Wells Fargo’s claims.
Even so, the fact that a large part of the industry supports, is actively piloting, or even uses Crypto in real-time, seems to refute the same claims. On the other hand, it would be a mistake not to note that with banks, it is actually more common for them to ban or merely pilot Blockchain networks, at this time. If you want a prime example of this, look no further than the Ripple Network’s partnerships, so far.
What makes Wells Fargo’s stance significantly more obscure is that they made it clear that they would still be looking at the Blockchain industry, as it moves forward and grows.
The central question then could be said to be: what is Wells Fargo’s true motivation for doing this?
Is it actually to just fall in line with the industry heavyweights? Is it because of multiple risks related to Blockchain payments, that could damage their existing business? Is it something else entirely?
Some banks, like the Toronto-Dominion Bank in Canada, have even claimed banning customers from buying Crypto with their credit cards, is a protective measure.
Usually the validation for this is that each and every Cryptocurrency is too volatile.
At the same time, it is often suggested that due to the Blockchain’s highly technical nature, it is not feasible to believe that each and every average consumer can thoroughly understand the industry.
As projects like Divi, which claims to be the Blockchain payment network for the people, go live this year, it will be interesting to see if they can truly normalize Cryptocurrencies for those who are currently tethered to a fiat only lifestyle.
Perhaps if these projects succeed, banks will reverse these bans and perhaps not. Either way, if the traditional banking industry fails to innovate in response to the rise of the Blockchain, it is logical to surmise that there will be more trouble on the horizon for them.
By: BGN Editorial Staff