America’s third largest bank Wells Fargo announced on Monday that its customers will no longer be allowed to buy cryptocurrencies using its credit cards. The bank is concerned about lowering asset quality and regulatory pressures on these coins.
JP Morgan Chase & Co., Citigroup, and Bank of America have already limited their customers from buying digital currencies through their cards due to credit risk and market volatility.
The most recent move of Wells Fargo could further discourage users from crypto investing. A spokesperson, however, commented that the organization will continue to watch the markets closely and evaluate this issue.
Wells Fargo Joins the League
On Monday, Wells Fargo joined the long list of crypto disabling banks. It issued this statement:
“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.”
However, bank spokesperson Shelly Miller said that they will “continue to evaluate the issue as the market evolves.”
Volatility and Lending Issues Continue
A 2017 survey by LendEDU revealed that 18 percent of Bitcoin investors fund their purchases through credit cards. Of these, 22 percent are unable to pay off their balances. This creates severe outstanding debt issues for the lenders.
Bitcoin, which is the poster boy of the cryptocurrencies, has shaved off over 60% of its gains since hitting an all-time high of $19,000 in December 2017. As casual investors are rushing out of the market owing to falling rates and regulatory pressures from around the world, the price of the coin has remained below $8,000 for the most part of this year. It is currently trading for $6,840.
Industry experts claim that the cryptocurrency will gain its lost sheen back by the end of the year and, eventually, enter a bullish cycle. Regular news of virtual coin heists and ICO frauds are keeping prices down and market sentiment skeptical in the meanwhile.