Wells Fargo & Company, a San Francisco-based financial services giant, announced recently that it will no longer allow cryptocurrency purchases using its bank-issued credit cards.
Joining the Ranks
U.S. financial services company Wells Fargo and Company has announced that it will no longer allow customers to use bank-issued credit cards for cryptocurrency purchases.
With this move, Wells Fargo joins the ranks of other major U.S. banks who have already prohibited the purchase of cryptocurrency with their credit cards — namely, JP Morgan Chase, Bank of America, and Citigroup.
The main concern, as expressed by a Wells Fargo spokesperson, lies within the high volatility of the cryptocurrency market:
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.
Nevertheless, Wells Fargo isn’t bolting the door permanently — noting that the bank “will continue to evaluate the issue as the market evolves.”
Further concerns seem to stem from a survey which shows that a little over 18 percent of cryptocurrency investors used credit cards to fund their purchase. The same study shows that approximately one-fifth of them failed to pay off their credit card balance after having purchased digital currency.
Bad Timing
The news comes amid a substantial overall decline of the cryptocurrency market.
Bitcoin, at the time of writing this, stands at $6,878 — after hovering over $7,500 for the past week. The entire cryptocurrency market suffered a $42 billion wipe-out over the weekend.
From an objective viewpoint, it may seem like it’s getting harder for regular cryptocurrency investors to take advantage of the current dip. Apart from the growing list of banks who are restraining their users from using their credit cards for cryptocurrency purchases, Visa and MasterCard also reclassified them as “cash advances” — essentially increasing the transaction fees by another 5 percent, adding to the previously existing 4 percent.
Do you think Wells Fargo’s recent move to halt cryptocurrency purchases with credit cards will have an impact on the market? Don’t hesitate to let us know in the comments below!
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