11 Jun Wells Fargo blocks buying bitcoin with credit card
It just got harder to buy cryptocurrency in the US as Wells Fargo announced that it has blocked its credit card holders from buying cryptocurrency.
Wells Fargo joins Citigroup, JPMorgan Chase and Bank of America in preventing consumers from purchasing cryptocurrency on their credit cards.
Banks fear overextended consumers
In an emailed statement to Bloomberg, Wells Fargo spokesperson Shelley Miller said the bank “will continue to evaluate the issue as the market evolves.”
Banks have expressed the fear of being left holding the bitcoin bag if consumers default on their cryptocurrency purchases given the high volatility of digital currencies.
How consumers bought crypto?
In December 2017, LendEDU reported a survey that showed 18.2% of consumers bought cryptocurrency using a credit card.
Research showed 22.1% of consumers did not pay off their credit card balance after purchasing cryptocurrency and 70.4% of consumers said they were comfortable paying interest on their credit card purchase of cryptocurrency.
A debit card was used by 33.6% and 18.6 used a bank transfer to buy cryptocurrency.
Bitcoin and cryptocurrencies tumbling
Bitcoin prices tumbled to as low as $6,771 with other cryptocurrencies dropping in value in trading today. Analysts blamed lower values on the recent report of a South Korean cryptocurrency exchange theft, as well as SEC investigations into potential bitcoin price manipulations and the threat of new regulatory actions in the US and other markets around the world.
One thing is clear, the road ahead for cryptocurrencies looks as rough as a dusty Wells Fargo stagecoach trail in the 1860s.
Visuals: source images courtesy of Wells Fargo