Banks in Different Countries Are Now Trying to Prevent Crypto Trading Through Credit Cards

As the markets continue to look bearish with a slight sprinkling of upticks, other factors seem to be jumping into the picture. As of late, China is seeking to further clamp down on the trade of digital assets by their citizens as they are now setting up firewalls so that their citizens will not be able to access domestic or foreign digital asset exchanges. The second factor is that banks in countries like India and other nations are seeking to prevent crypto trading through credit cards. A recent bank that has expressed concerns and has made a move in this regard is an institution located in the United Kingdom, Lloyds Bank. The institution is following the coattails of other financiers and is blocking the purchase of cryptocurrencies through the use of credit cards.

The minimization of traditional credit from the markets

The banking group will be notifying their customer base of the current changes and will be setting up firewalls to prevent purchases of digital assets with credit.

Users of debit will find that they are not constricted, but of course, why would they be? Debit is their money at the end of the day.

Be advised that the banking group is comprised of significant players like Halifax, MBNA and the Bank of Scotland, in addition to Lloyds and this implementation will affect consumers across the board at these institutions.

Coinbase Confirms

This is along the lines of a recent communication sent by the cryptocurrency exchange, Coinbase. The trading firm sent out an email updating its users of change happening in the sector related to credit cards. The trading platform had several reasons to send out the email, but one of the most prominent may be that they want to let their customers know that they are not the ones who are charging more fees. The email notified users of the changes made by financial institutions.

“Recently, the MCC code for digital currency purchases was changed by a number of the major credit card networks. The new code will allow banks and card issuers to charge additional “cash advance” fees. These fees are not charged or collected by Coinbase. These additional fees will show up as a separate line item on your card statement.”

The reasoning of the credit card firms and banks

These firms seem to be echoing lines that the People’s Bank of China and other federal reserves across the world, is saying, such as minimizing financial risks, protecting the consumer from financial harm and more. They profess to save their customers from further debt, debt that they may have to take on if the crypto markets don’t do as well people would hope.

Cryptolending

Will organizations like SALT and Ethlend be able to capitalize on the lack of traditional lending and be able to see an uptick in the use of their platforms?

State of the markets

The markets have been in a sea of red and a significant correction period is taking place in cryptoland as the leading cryptocurrencies take actions to live up to their market capitalizations and prove their value over the course of this year. The price of Bitcoin was trading at a rate of  $7,425 a large dip from 17,000. The price of Ethereum has gone down to $725. NEO is almost cut in half, trading at a high of $167 on the 29th of January and currently trading at $87.00.

About Lloyds Bank

Since its foundation on 3 June 1765, Lloyds Bank has been serving the households, businesses, and communities of Britain. And, in 2015 we’re celebrating 250 years of helping the people of Britain with the things that matter most to them.

We offer a comprehensive range of financial products and services – including current accounts, savings, mortgages, loans and credit cards.

Our heritage

The origins of Lloyds Bank stretch back to 1765, when John Taylor and Sampson Lloyd set up a private banking business in Birmingham.

Lloyds Bank is a part of the larger Lloyd’s Banking group. A financial services group focused on retail and commercial customers – with millions of customers in the UK, and a presence in nearly every community.

Our role is to help businesses and individuals while making a positive contribution to the communities in which we operate.

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PayPal Board Member and CEO of XAPO on Bitcoin

The Interview

The CEO of Xapo, Wences Casares, who also serves on the board of the behemoth payments company, Paypal sat down with the current CEO of Paypal to discuss Bitcoin, Blockchain and other matters.

Dan Schulman elaborated on the discussion topics:

“In my first Facebook Live of the new year, I’m sitting down with Wences Casares, a PayPal board member, renowned entrepreneur, and CEO of Xapo. Wences and I are discussing the rise of blockchain and other emerging trends in technology. I’m also excited to share a big milestone for the PayPal community. Tune in to hear what it is and send us your questions in the comments below!”

The interview took place on the platform of Facebook and started off the CEO of Paypal talking about the accomplishments of Wences.

Wences has had various involvements in the internet and financial space, as he was one of the first few involved in the ISP generation in South America as well as creating the first brokerage in the same continent. Wences is not new to the game of finance, money flow processing and the next era of finance. He’s stepped into this new era by participating as the lead individual at Xapo, a growing Bitcoin Wallet provider.

Wences Thoughts on Bitcoin and Blockchain

Wences believes that people are paying attention to cryptocurrencies because it is an interesting experiment, it’s an experiment that could change the world more than the internet, but he cautions that there is at least a twenty percent chance that the experiment could fail. He continues to say that he thinks that the experiment will prove results over the course of five to ten years, he stresses that it will take time. If the experiment does succeed, the world will look quite different.

There would be concrete economic differences; if the experiment succeeds, one Bitcoin will be worth a million dollars, leading those who didn’t purchase at current prices wishing that they had purchased now. At the same time, he stresses that there is risk involved and tells potential investors not to invest more than they can afford to lose.

How he got involved and predictions

He recalls how his parents lost their wealth several times over the course of young years due to decisions that were made by their banking and government systems. Hyperinflation was one of the reasons why the currency was devalued, and their purchasing power was significantly decreased. He remembers that his mother pulled him and his sisters out of school one day, she took them to the supermarket and she carried a plastic bag with her decent salary. She instructed him and his sisters to get more produce from the supermarket because if they didn’t purchase it now, they would have less buying power the next day.

Another instance he recalled was when the government confiscated all the bank deposits. Thus, this affected those who didn’t have various real estate holdings or bank accounts abroad.

Thus he got interested in Bitcoin because it could solve the prior problems giving people more power in how their money is handled. He dedicated his career, reputation and more to contribute to the success of Bitcoin because of this fundamental thesis.

According to Wences, the only blockchain that is working at scale, by far, where one does not have to trust any counterparty is that of Bitcoin, and this is so because of the mining network. The mining network places immense power into the network. They do so because they are getting in Bitcoin, if one were to remove Bitcoin, miners would disappear, thus taking away the network.

When asked how Wences looks at other cryptocurrencies in relation Bitcoin, he stated:

“Again, I think that this is an experiment and as such, nobody really knows what the outcome of the experiment is, my best guess at this point, is that when the internet was emerging, we didn’t call it Internet, we called it TCPIP, some people said we are going to use this for the Web and email. We will use other technologies for video and voice. But today, the internet is the one that all of these low bandwidth and high bandwidth applications run on.”

He believes the same incentives that made TCPIP protocol win out in regards to transport, are present for value, just more so, and the extent of trust in the blockchain is the square of the processing power.

He ultimately believes there will be one blockchain for value. He notes that just like we have one internet for everything, we’ll have the same for value and as of this current moment, it seems that it will be the Bitcoin Blockchain.

Wences continues to note the importance of the idea of the standard of value.

“I can imagine a world in which bitcoin becomes a global standard of value — it’s the first global and non-political standard of value — coupled with the first global and non-political standard of settlement. It would be the biggest leap forward in the democratization of money we’ve ever seen.”

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