Wells Fargo spokespersons informed early today that their organization will be banning cryptocurrency purchases starting this Monday, according to an article by Fortune. It had been one of the only major banks that had not meddled with credit card purchases of cryptocurrency, till now.
Wells Fargo is a gigantic financial institution that lends services all around the world. It is the third biggest bank in the United States, having more than 48 million clients worldwide. This announcement comes after a dip in the cryptocurrency market prices, that shed more than 10 percent of its value during the weekend for reasons that are still being studied.
Be it that a hack of a Korean exchange caused it, or was the subpoenas that were sent to four of the biggest exchanges to inquire about possible cryptocurrency price manipulation, one thing is certain: it evidenced the volatility of the market, and scared Wells Fargo’s analysts, that in consequence banned the purchases. Bitcoin dropped more than 800 dollars in just about one day, leading a continued drop in the market for all cryptocurrencies.
The problem with cryptocurrency purchases is that banks fear that if the price of the cryptocurrency purchased goes down, the investors could cease or delay paying their credit cards quotas. The banks are acting as a sort of protectors of customers (in their own interest). Still, they have declared that they will keep watching the market.
Wells Fargo is but one of teh last banks that have banned cryptocurrency purchases with credit cards. This kind of measure has also been taken by other giants like Bank of America, Citigroup and JP Morgan Chase. These banks had done this earlier this year, after the big drop in January. Before, some banks had also changed the terms in which cryptocurrency purchases are done, handling them as cash advances, that have a bigger interest rate than normal purchases.