The bitcoin had a tough month with market regulations, ban and rejections increased. Regulators, banks, and governments have been at the center as they try to protect the mainstream markets from the disruptive nature of the digital currencies. Most of these critics are more negative towards the cryptocurrencies but strike a positive acceptance tone on the underlying Blockchain technology. The Blockchain technology developed on a decentralized network that makes it secure, reliable and efficient for a diverse number of sectors.
Cryptocurrencies suffered another hit today as two big banks; JPMorgan Chase and Bank of America introduced a ban on crypto-credit card transaction, according to Bloomberg reports. The bans to take effect on Feb 3rd and Feb 2nd for the two banks JPMorgan Chase and Bank of America. The ban means that all transactions to known crypto exchanges will be automatically declined.
The ban will affect only credit card users and does not apply to debit or ATM cardholders. Bloomberg further stated that banks are trying to prevent customers from living on what they cannot afford. The crypto price-swings have become a major concern as the digital currency lost over 30% (equal to over $1300) in just 1.5 hours.
Banks are trying to be anti-money laundering (AML) compliant and cut credit card fraud. JPMorgan Chase and Bank of America are not the first banks to introduce crypto regulations, with others expected to follow. Citigroup reported on Friday that it will be also halting cryptocurrency transactions through credit cards and more to follow as it reviews its market policies. The credit card ban is the first measure as the banks and regulators try hard to close all money laundering, tax evasion, and credit card fraud loopholes.
Investors and customers who had already placed or use an automatic order to buy the cryptocurrencies are the most affected. The bitcoin has experienced its worst month, of all. It hit its lowest recently after falling beyond $8,000 on Friday. The regulations have piled as Facebook bans cryptocurrencies and initial coin offerings and fears of price manipulation increase.
MasterCard reported that there was a 22% increase in its cross-border transactions. The transactions were largely linked to crypto transactions and crypto spending abroad. The Banning of the credit card transaction is a signal to follow as the banks take a hard stand against cryptocurrencies and crypto related products. Early in January, Merrill Lynch a brokerage arm of the Bank of America previously banned its financial advisors from trading Bitcoin-related investment. Futures Industry Association (FIA) (composed of influential Wall Street banks like JPMorgan Chase and Goldman Sachs) a major lobby group filed complaints with the US Commodity Futures Trading Commission on the impact of Bitcoin on investments.
Tough regulations in such a volatile market drive the demand and increase the hype of crypto resulting in a dip innovation.
