Several credit card firms have started forbidding Bitcoin and cryptocurrency purchases with various decent reasons. This very week, Apple Inc. in collaboration with two American multinationals financial services firms Mastercard Incorporated and Goldman Sachs Group, officially rolled out a new card providing customers 3% cash-back (discount) on products and services bought directly from Apple, and 2% discount on any products bought using Apple Pay – Apple’s electronic wallet service - and 1% on other related transactions.
Even though Apple Card has no yearly fees or other related transaction fees, it carries some fine print. Particularly, Apple’s credit card may not be in any way applied for cash advances or equivalents, and this ban takes account of cryptocurrencies such as Bitcoin (BTC), as revealed by the customer agreement published on Goldman Sachs’ official website.
In banning card purchases of digital currencies, Apple is being supported by other issuers and providers of credit cards including Citigroup Inc. based in New York City, JPMorgan Chase & Co. with its headquarters in NY, Bank of America (BofA) based in North Carolina and Capital One Financial Corporation based in Virginia. Credit card issuers seemingly don’t view cryptocurrencies including Bitcoin as digital gold, or a durable investment, just as a wide number of cryptoasset collectors do.
From February last year, all these four multinational financial services giants have prohibited their clients from purchasing cryptocurrencies including BTC using their cards on major virtual asset exchanges such as Coinbase. Another American financial services firm based in California Wells Fargo & Company, also barred its customers from buying digital assets using their credit cards since June last year. Also, Gemini cryptocurrency exchange only accepts clients to fund their accounts via bank, wire transfers or digital currency deposits.
The attempt of financial institutions to ban customers from making purchases using cryptocurrency may be attributed to security matters and the volatile nature of Bitcoin. Credit cards further have the risk of default. In addition, several credit card firms have tried to stop customers from participating in gambling and buying stocks in order to prevent compulsive behaviors that could cause financial disintegration.