In the recent past, several times, banks have directed payment gateways to halt crypto transactions. Although the popularity of cryptocurrencies is touching the skies, some banks still hesitate to accept Bitcoin or Altcoins and process their transactions. Even a decade after the launch of cryptocurrencies, it is too complicated for many banks to handle them. So, why do banks refuse to process crypto transactions? There are different reasons for this. The best cryptocurrency in terms of market cap is conveniently tradable via http://bitcoinsystem.app.
Table of Contents
1. Banks Consider Crypto Transactions Illegal
There are a lot of regions in the world where cryptocurrencies are banned by the central government, which makes them illegal. So, in a region where digital currencies are illicit, banks also find it unlawful to process crypto-related transactions. For instance, banks in China or Bolivia do not process crypto transactions as these currencies are banned by the government.
2. Banks Find It Easy To Say “NO”
Cryptocurrency transactions are a bit complicated, and banks need to learn about many things before processing a crypto transaction. Banks find it hard to get indulged in this activity of learning and conveniently say ‘No’ to crypto users when they ask for processing their crypto transactions.
3. Banks Avoid Angry Customers
Cryptocurrency is highly volatile and sometimes some poorly-informed users become a victim of crypto-related Ponzi schemes. These customers often demand chargebacks. Banks do not process crypto transactions to avoid such angry customers.
4. Banks Do Not Want To Deal With Money-Launderers
Crypto-related crimes are rising, and bad actors are using digital currencies to hide their assets or to make their illegal money legitimate by money laundering. Banks want to play safe by not facing the hassle of dealing with these crimes regardless of whether their customers are criminals or victims.
5. Banks Do Not Find Crypto Worthy Enough To Make Efforts For
Some banks are pleasantly accepting cryptocurrencies, such as Medici Bank. However, many banks express their opinion that the cost of devoting time and money to handle their customers’ crypto-related concussions and establishing mechanisms to stop crypto-related crimes (scams & frauds) is just too much for such a new field like crypto.
These are some of the reasons that banks do not process crypto transactions. Now, if the banks stop crypto exchange transactions, there are two distinct schools of thought in this regard. Let’s discuss both of them one by one.
According to the first approach, if the banks stop crypto exchange transactions, it will make no impact on the crypto market, and nothing will happen. The operations of the crypto market will continue in the same way they are going right now. In simple words, it will make no difference at all. The prices of cryptocurrencies are completely determined by the forces of demand & supply.
Having a demand for cryptocurrency indicates that somewhere someone is willing to buy it. It means that for every seller, there is a buyer in the market, and banks have nothing to do with it. Therefore, if the banks halt transactions for crypto exchanges, users will opt for Peer-To-Peer transactions, which can also be called P2P or B2B. This will work in a way that an individual will directly buy from the buyer and send money directly to the bank account of the seller. Since these transactions will be performed by the users, banks will not be able to do anything.
This approach completely opposes the first approach. According to this approach, if the banks stop crypto exchange transactions, the industry would suffer heavily in the long run because the majority of the accounts are still connected to banks, and all the cryptocurrencies are valued in monetary terms or fiat money.
Until we step into mass adoption where companies start accepting Bitcoins and other digital currencies as a form of payment and governments take necessary measures to assign them a universally accepted method of transaction, unfortunately, banks will control and govern the industry. Since banking sector is the only sector that can become a reason for market crashes short of banning a large economy. Therefore, banks must continue to allow crypto users to make crypto transactions because it is the only way to avoid a market crash.