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.
This is the messages from a spokesperson of San-Francisco-based bank, Wells Fargo, after the bank has announced that its customers will no longer be able to buy cryptocurrencies using its credit cards. This latest development was reported by Fortune late yesterday.
People that are against cryptocurrencies the most are banks and bankers. Since the advent of cryptocurrencies, banks have been looking for a way to make them obsolete due to the threat that cryptocurrencies pose to them.
Cryptocurrencies go against the centralization dogma that banks value and giving financial freedom and control to the people is exactly what the banks don’t want, and something that Bitcoin and others have been trying to do for some year now. In order to stop the spread of cryptocurrencies usage, which are becoming more popular every day, banks have been taking some drastic measures and one of such measures is to make it almost impossible for their customers to purchase cryptocurrencies using their credit and debit cards.
Wells Fargo joins other top banks in banning crypto purchases
Wells Fargo, which is considered as the third largest bank in the United States in terms of assets, revealed yesterday that it has now stopped its customers from purchasing cryptocurrencies using credit cards issued by them. The spokesperson who briefed the media added that the decision was made so as to avoid the multiple risks associated with cryptocurrency usage.
The spokesperson, however, added;
Wells Fargo will continue to evaluate the issue as the market evolves.
With this latest development, the bank has now officially joined its peers like JP Morgan Chase, in banning cryptocurrency purchases using its credit card. JP Morgan and its CEO, Jamie Dimon, have been one of the biggest critics of Bitcoin and other cryptocurrencies. It was, therefore, no surprise when the bank announced early in February that it has banned the purchase of cryptocurrencies using its credit cards.
A spokesperson for the bank, back in February, told the press;
At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved. We will review the issue as the market evolves.
JP Morgan wasn’t alone in that situation. It was joined back then by Bank of America and Citigroup, with only Wells Fargo left out of the decision at that time. Citigroup while addressing the issue at that time stated that it has made the decision to no longer permit credit card purchases of cryptocurrency and they will continue to review their policy as this market evolves.
Bank of America made its announcement via an email statement to its clients, revealing that the bank has decided to decline credit card purchases of cryptocurrencies. After the announcement by the three above-mentioned banks, JP Morgan, later stated;
Financial institutions can face the risk that payment processing and other services could be disrupted by technologies, such as cryptocurrencies.
This decision by Wells Fargo is coming at a really bad time for Bitcoin and other cryptocurrencies which have suffered in terms of prices over the past few days. The price of the flagship cryptocurrency has dipped by 11% over the past 48 hours and is now trading just above the $6,800 mark at the time of writing this report. The plunge in Bitcoin price has subsequently led to a plunge in other cryptocurrencies, with the top cryptocurrencies dropping by 15% or more during the same timeframe.
Despite the market prices down at the moment, traders and analysts are very much optimistic that Bitcoin would turn things around and make remarkable strides before the year runs out.
Other global banks take similar stance
The tough love received by cryptocurrencies isn’t restricted to the United States alone with other countries enacting similar sanctions. In neighboring Canada, the Toronto-Dominion Bank (TD), which is one of the biggest banks in the continent, told its customers via an email statement that they will be halting cryptocurrency purchases with their credit cards. The bank in its statement added that it is taking these measures in order to serve and protect their customers, as well as the bank.
The largest bank in India, HDFC Bank, also made a similar announcement, telling its customers that its debit and credit cards can no longer be used to purchase digital currencies, adding that this ban is to ensure the safety of their customers.
In the UK, Lloyds Banking Group banned cryptocurrency purchases with its cards just a few days after JP Morgan, Citigroup, and Bank of America made their call. A spokeswoman for the bank, back then, stated;
Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.
How the news of Wells Fargo ban will affect the market is still unknown but with the recent bear cycle of crypto market, it not a good news for investors and traders.