Recently, we could notice an evident and growing confrontation between crypto-economy and traditional financial institutions. Thus, the largest banks in the world praised the blockchain technology and its potentials for changing the financial markets, at the same time severely criticizing bitcoin and other cryptocurrencies for their insecurity, high-risk, volatility, excessive anonymity, etc.
At the beginning of this year the banks took more decisive actions, which was a new phase of confrontation. Crypto exchanges started to have serious issues with banking services across the world, also retail investors were not able to buy any cryptocurrency with payment cards. For example, the payment company Visa didn’t allow bitcoin users from Europe to use debit cards.
The restrictive activities of banks may differ in various jurisdictions, but they all have similar motivations and arguments. All these negative actions from banks are often presented as “protection against multiple risks” that associated with cryptocurrencies. For instance, Bank of America has recognized that cryptocurrencies threat to its business models, which is ridiculous in my opinion.
So, first let’s take look at some examples that show the complexity of the relationship between some traditional institutions and cryptocurrency companies and also other some examples of how institutions of different countries tried to “protect” crypto investors.
In February 2018, JPMorgan Chase and Bank of America started to reject clients’ payments for buying cryptocurrencies. Banks have rejected payments because customers would buy more cryptocurrency than they could actually afford. Also, according to Bloomberg, other US banks are going to or have already raised the fees for the purchasing crypto assets. Toronto Bank, one of the largest Canadian bank stopped letting customers use credit cards to buy cryptocurrency. At the same time, another large bank Royal Bank of Canada has simply warned about the risks and excessive volatility of digital assets and allowed customers to buy cryptocurrencies with payment cards.
Lloyds Banking Group, the British financial conglomerate has banned purchases of cryptocurrency with credit cards. The largest Great Britain bank expressed concern that clients will start buying out cryptocurrencies using the cheap borrowed money. Sooner Mark Carney, the Governor of Bank of England said that they want to put an end to the “anarchy of cryptocurrencies” and to bring this cryptosystem to the standards of the traditional markets. A little earlier because of the new policy, Visa stopped servicing customers of the largest cryptocurrency companies in Europe.
By the end of 2017, South Korean banks have announced that all operations with Bitcoin have ceased altogether. Many Korean banks stopped working with crypto companies after the government announced “emergency measures” to regulate digital money. Later a cryptocurrency trading was banned by the authorities of this country due to anonymous. So, generally, that means that the South Korean authorities are more concerned about risks of using cryptocurrency for laundering illegal money, rather than the financial stability of cryptocurrency companies and their clients.
The Indian crypto exchanges have started to face problems with banking services. According to the leaders of the major bitcoin exchanges, information about the ban on the cryptocurrency is not incorrect and the media simply “making an elephant out of a fly”. Earlier, the Indian Government repeatedly reminded that Bitcoin is not a legal currency in the country.
From aforementioned, we can conclude that there is a large-scale attack of banks on the crypto industry from all countries. As you can see restrictive measures are often similar. So, basically bans are imposed under the pretense of protecting clients who can spend “more than they should” on cryptocurrencies and immediately buy weapons and drugs. Also, restrictions are often imposed under the pretense of regulatory and legal uncertainty, as well as the need for strict compliance with the AML / KYC policy.
It would seem that the whole world went to war against the crypto industry. However, there are many competent banks and companies that are trying to keep up with the innovations. These kind of companies are adaptable to various changes and they see cryptocurrency as not a threat, but an opportunity to make business better. In recent times, we see more positive news like “Bank of America Applies for Blockchain-Based Encrypted Crypto Storage System Patent”. It is clear that the development of the markets in this uncontrolled way is unprofitable for governments and banks. But they can no longer ignore it and eventually, they will have to adapt and admit cryptocurrencies. So, mass adoption of blockchain technology is inevitable.
Nowadays the adherence to financial regulations is the main key driver for a sustained way to mass adoption. Cashaa takes all necessary steps to ensure that compliance has the highest global financial standards. It has a high quality AML/KYC policy, which makes it trustworthy and customer-friendly. Cashaa platform focuses on bridging the gap between the crypto-economy and traditional financial infrastructure, enabling users to store, send and receive for almost zero fees. It is a perfect solution for crypto companies to make a deal with traditional economies via Cashaa. All problems with banks, exchanges, and purchases that described above could be easily solved by using Cashaa platform. Cashaa aims to find a common language between the old and new payment systems and these kind of features will make Cashaa the most valuable company in the future.
Conclusion
From year after year, an over-regulated traditional financial system generates a growing power in the hands of banks and large financial institutions. Therefore cryptocurrencies were created as an alternative to the over-regulated traditional finance. The cryptocurrency market is as close to perfect competition as possible. And this provides an economy to properly grow. Companies like Cashaa can help to survive companies during financial crises. As a result no financial and economic crises, no suffering from poverty, no inflations, ect.
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