The widely acceptance of blockchain-based technology for quickly, smoothly and efficiently transacting cross-border making banks think of accepting this system. Still many banks are against of buying cryptocurrency using bank-issued credit cards.
Many banks proscribed using credit-cards of crypto where US-based banking institutions are fewer to do so. Crypto not being a store of value is known to be a popular volatile asset class. But the cause wasn’t influenced by the thefts happened previously from crypto exchanges.
To determine the price fluctuation one needs to consider the course of price fluctuation of 2018 and 2019 for indications of the bitcoin’s volatility. Alluring histrionic volatility of BTC has been excluded by banks and regulators.
Throughout CFDs many people are trading price movements at regulated brokerages that raises public interest in Bitcoin and altcoin and banks are taking initiative to land on the lucrative space.
Intention of Banks towards Bitcoin and Cryptocurrency
The downturn of cryptocurrency of 2017 left the sight of people from the industry but a new hope arose in 2019 and it brought thinking to the financial institutions and banks. In this field credit card companies worked to change merchant category code relating to cryptocurrency purchases.
In that region crypto brokerages cuts out 23%-25% as advance fees. They are using the higher fees as a safeguard at cryptocurrency purchases are involved. According to taxation, Bitcoin and other crypto are taken as asset by IRS and strict measures have been taken on crypto by SEC.
Many U.S. banks allow crypto transactions with credit cards. Citybank has been inquiring the potentials of blockchain-based technologies since 2015 and the bank scrapped their Citicoin, thought to be boasted of at least 3 blockchains as a concept of virtual coin. They also disengaged themselves from issuing credit-card on crypto and that led consumers shift to debit cards for their crypto transactions.
Rest of the banks is providing apps linked to cryptocurrency for buying and selling crypto such as what Simple Bank does. To mention, JP Morgan has a bank-backed cryptocurrency, JPM Coin. As a banking scene this is also an example.
Right now banks confess that as a secure, speedy technology, the blockchain technology is reliable and that is the reason of higher investment to this project by JP Morgan. But there was a time when this financial powerhouse was in disfavor of crypto and blockchain technology.
This is how banking sectors are embracing blockchain technology gradually.