Friday, February 3, 2023

Canada’s Bank of Montreal Enforces Ban on Cryptocurrency Purchases

Canada’s Bank of Montreal Enforces Ban on Cryptocurrency Purchases

As the prices of popular cryptocurrencies continue to decline, trust surrounding virtual assets seems to be dissipating. Canada’s BMO Financial Group (Bank of Montreal) is the latest financial institution to ban cryptocurrency purchases for customers with credit or debit cards registered with the bank.

Also see: Bitcoin Cash Gives Devs More Freedom, Say Bitcoin Unlimited’s Andrew Stone and Peter Rizun

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A Bank of Montreal ‘Whistleblower’ Explains

The policy reportedly applies to all business and personal cards. News first spread two days ago when a Reddit user claiming to be a Bank of Montreal employee posted a leaked memo explaining that all cryptocurrency purchase transactions would be halted beginning on March 28th.

The document reads:

“Effective immediately, BMO will be blocking cryptocurrency merchant transactions. This decision was made due to the volatile nature of cryptocurrencies and to better protect the security of our clients and the bank.”

One of Many Blockades

Canadian cryptocurrency users have been subjected to several attempts by major banks to halt cryptocurrency buys and usage. Last month, Canada’s largest institution Toronto-Dominion Bank (TD Bank) sought to prevent several cryptocurrency purchases conducted by its customers, while the Royal Bank of Canada (RBC), Canada’s second-largest financial establishment, said it would continue to allow users to buy cryptocurrencies, but only under “limited circumstances.”

Current sentiment suggests that the primary fear revolves around the fluctuations of digital asset prices. The rationale goes that, should customers make too many purchases that go awry they may not be able to pay their debts, and the banks will be left to clean up the messes.

Many establishments believe the move to outright bar cryptocurrency purchases is the best way to “think ahead” and prevent future problems. While banks’ newfound concern for their customers’ financial responsibility is welcome, more cynical observers have suggested they simply don’t like the idea of competition from an alternate financial system that’s largely beyond their control.

Bans Have Also Occurred in the US and UK

Back in January 2018, Bitsonline reported that Capital One was allegedly barring customers from using both credit cards and their bank accounts to purchase digital currencies. Interestingly, the company made no official announcement that such action was taken, leaving many users to experience either delays or cancellations in their buys without firsthand knowledge of what was happening. This led to several complaints on social media and subsequent account closures.

In addition, banks that were once friendly towards cryptocurrencies like Metropolitan Bank Holding Corp. also began taking stances against international cryptocurrency wire transfers. The move was supposedly in response to an incident of international fraud by one of the company’s many clients.

Last February saw several other U.S.-based establishments banning cryptocurrency purchases. Companies ranged from Citigroup to Bank of America and JPMorgan. In the U.K., the ban has also expanded to organizations like Halifax, MBNA, and the Bank of Scotland.

Are banks ever likely to ease up, or is this wishful thinking? Post your comments below.

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