Bitcoin and Ripple Are Threatening Traditional Financial System – Here’s How

Financial Systems

Traditional Financial Systems all around the globe are among the most significant critics of cryptocurrencies, amid the emerging possibility that cryptocurrencies can steal a massive amount of market share from banks in the days to come. Cryptocurrencies don’t require any intermediation for processing the transaction; this phenomenon allows digital currencies to complete the transaction in less time with lower cost when compared to banks.

Head of State Bank of India said; “By 2030, traditional banking services could cease to exist with Blockchain. Blockchain can replace all services of banks.”

Though banks are rapidly testing ...

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Some Major Canadian Banks Still Allow Cryptocurrency Credit Card Transactions

Some Major Canadian Banks Still Allow Cryptocurrency Credit Card Transactions

While TD Bank has revised its policies and stopped allowing customers to purchase cryptocurrencies using its credit cards, some major banks in Canada still allow crypto credit card transactions, the banks reportedly confirmed on Friday.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

TD Bank Halts Crypto Credit Card Purchases

Some Major Canadian Banks Still Allow Cryptocurrency Credit Card TransactionsCanada’s largest bank by assets as of April of last year, Toronto-Dominion Bank (TD Bank), said on Friday that it is “halting the use of its credit cards to buy cryptocurrency as it conducts a review of the ‘evolving market’,” Financial Post reported. The bank explained in an emailed statement:

At TD, we regularly evaluate our policies and security measures, in order to serve and protect our customers, as well as the bank.

TD Bank’s Friday announcement reverses its stance earlier this month when the bank said it permitted cryptocurrency purchases using credit and debit cards “as long as the merchant is authorized to accept Visa, Mastercard, Interac or Visa debit and the transaction isn’t determined to be fraudulent,” according to the bank’s spokeswoman Julie Bellissimo.

Some Banks Still Allow Crypto Credit Card Purchases

Some banks in Canada, however, still allow their customers to buy cryptocurrencies using their credit cards currently.

Some Major Canadian Banks Still Allow Cryptocurrency Credit Card TransactionsRoyal Bank of Canada (RBC), the country’s second-largest bank by assets, said on Friday that “it does allow its credit and debit cards to be used for transactions involving cryptocurrency in limited circumstances,” Financial Post noted. Nonetheless, the bank cautioned clients about the volatility of cryptocurrencies which “could expose them to substantially higher debt levels than they are able to repay.” An RBC spokesperson said in an emailed statement:

We do recognize that regulatory, risk and other external environmental factors relating to cryptocurrency continues to evolve…As such, we continue to review our policies to consider how we can best support clients.

Some Major Canadian Banks Still Allow Cryptocurrency Credit Card TransactionsThe Bank of Nova Scotia (Scotiabank), the third largest bank in Canada by asset, is also looking closely at its cryptocurrency transaction policy, the news outlet added. The bank’s spokesperson said in an emailed statement, “We understand that regulatory and risk factors related to cryptocurrency continue to evolve and as a result, we are closely reviewing our policies with respect to cryptocurrency transactions.” At the time of this writing, the bank has not announced any changes in its policies.

Additionally, the National Bank of Canada, the country’s sixth-largest lender, said earlier this month that it allows crypto transactions, the publication further noted.

A Global Trend

Globally, an increasing number of banks are halting the use of their credit cards for cryptocurrency transactions. In the US, JP Morgan, Bank of America, and Citigroup have stopped allowing customers to use their credit cards to purchase bitcoin and other cryptocurrencies.

Some Major Canadian Banks Still Allow Cryptocurrency Credit Card TransactionsIn the UK, Britain’s largest banking group, Lloyds Banking Group, has banned its customers from using credit cards from any of its subsidiaries to buy cryptocurrencies including Lloyds Bank, Bank of Scotland, Halifax, and MBNA.

In Australia, the Commonwealth Bank of Australia (CBA) announced last week that it would no longer allow customers to purchase cryptocurrencies with credit cards. “We have made this decision because we believe virtual currencies do not meet a minimum standard of regulation, reliability, and reputation when compared to currencies that we offer to our customers,” the bank explained.

In Asia, Thailand has asked all commercial banks in the country to disallow cryptocurrency purchases using credit cards. In India, while SBI is allowing the use of its credit cards to buy cryptocurrencies for the time being, Citibank has banned the use of its debit and credit cards for crypto purchases.

Do you think all banks will eventually stop allowing crypto purchases using their credit cards? Let us know in the comments section below.


Images courtesy of Shutterstock, TD Bank, RBC, and Scotiabank.


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The post Some Major Canadian Banks Still Allow Cryptocurrency Credit Card Transactions appeared first on Bitcoin News.

20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo Evaluations

20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo Evaluations

Over twenty cryptocurrency exchanges in South Korea have agreed to undergo evaluations, including the country’s top four exchanges: Upbit, Bithumb, Coinone, and Korbit. This is part of their self-regulatory efforts, in conjunction with the Korean Blockchain Association.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

21 Exchanges Participating So Far

The Korean Blockchain Association, an industry group formally launched in January with 66 members, is primarily focused on self-regulation. The association, “composed of 33 virtual currency exchanges, said 21 of its members, including major players Upbit, Bithumb, Korbit, and Coinone, will undergo evaluations,” Yonhap reported on Wednesday.

20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo EvaluationsAccording to local media, crypto exchanges that have confirmed their participation in self-evaluation include Glosfer, Nexcoin, Zeniex, Kairex, Kcx Exchange, Komid, Coinway, Coinzest, Plutus DS, Dexko, Gopax, Okcoin Korea, and Huobi Korea.

The main purpose of the evaluations is to determine if members have complied with a set of self-regulatory measures that the group has set.

An official of the association was quoted by Asia Economy saying, “I respect member companies’ willingness to create a secure cryptocurrency market…We will make efforts to ensure strict and fair self-regulatory review.” Kim Hwa-joon, vice chairman of the association, was quoted by Zdnet detailing:

It will include capital standards, security standards, principles on listing procedures, disclosure of information, etc, and I expect investors to believe that they [exchanges] are more stable if they have passed the examination.

According to data collected by the Korean government, sales by local cryptocurrency exchange operators soared approximately 88-fold in 2017 compared to the previous year.

Self-Regulatory Efforts Challenged

The association first announced self-regulation in December when the government introduced a set of cryptocurrency measures to curb speculation in the crypto market. It “also established a set of specific ethical codes for the virtual currency bourses, including strict rules on insider trading and market manipulation,” Yonhap noted.

However, recently small and medium-sized exchanges have been voicing concerns regarding the effectiveness of joining the association and declaring self-regulation. They were led to believe that, by joining the association, they would be able to obtain virtual accounts from banks after the government-mandated real-name system went into effect.

20+ South Korean Cryptocurrency Exchanges Voluntarily Undergo EvaluationsHowever, following the implementation of the real-name system, banks are reluctant to issue virtual accounts to small and medium-sized exchanges, choosing only to provide services to the country’s top four exchanges.

Earlier this week, twelve crypto exchanges including Gopax, Coinnest, and Coinpia, sent a joint statement to the association, requesting a meeting to discuss the issue of virtual account issuance.

Kim acknowledged the problem and was quoted by Fntimes saying:

Disputes may arise in operating the organization..We are trying to solve this problem.

The association has also discussed the problem with Choi Heung-sik, the director of the country’s Financial Supervisory Service (FSS). He promised to encourage banks to work with more crypto exchanges, citing that there are three banks that have set up the real-name system but are not using it to issue virtual accounts for crypto exchanges.

What do you think of South Korean crypto exchanges voluntarily undergoing evaluations? Let us know in the comments section below.


Images courtesy of Shutterstock.


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South Korea Supports ‘Normal’ Cryptocurrency Transactions

South Korean Regulator Supports 'Normal' Cryptocurrency Transactions

The director of the South Korean Financial Supervisory Service has announced that the government will support “normal” transactions of cryptocurrencies. Acknowledging that most crypto exchanges are having problems obtaining virtual accounts, he promises to encourage banks to work with them.

Also read: Indians Look to Buy Bitcoin Overseas as Regulations Tighten

Supporting ‘Normal’ Crypto Transactions

The director of South Korea’s Financial Supervisory Service (FSS), Choi Heung-sik, said at a press conference on Tuesday, as reported by Yonhap:

The government will support ‘normal transactions’ of cryptocurrencies.

South Korean Regulator Supports 'Normal' Cryptocurrency Transactions
Choi Heung-sik.

The Korea Times further quoted him elaborating, “The whole world is in the process of reconsidering to find a framework for virtual currency, and that we should make it a normal transaction instead of strengthening regulations.”

Choi’s latest announcement contrasts his earlier stance when he called for strict regulations, stating that “bitcoin will lose its bubble later. You can bet.” Shocked by the regulator’s statement, a South Korean citizen filed a petition with the Blue House, calling for the dismissal of Choi as the director of the FSS. The petition, which ended on January 27, had 40,149 signatures. According to the rule of the Blue House, a petition needs 200,000 signers for the government to answer.

Helping Small and Medium-Sized Exchanges

Prior to his Tuesday announcement, Choi held a meeting with the Korean Blockchain Association and representatives from local cryptocurrency exchanges, including the chairman of the Association’s self-regulatory committee, Yonhap described.

South Korean Regulator Supports 'Normal' Cryptocurrency TransactionsIt has been three weeks since the regulators enforced the real-name system at exchanges and ended the use of virtual accounts that allowed for anonymous cryptocurrency trading.

However, since the implementation of the new system, banks have only been issuing new virtual accounts for the country’s top four exchanges: Upbit, Bithumb, Coinone, and Korbit. They are reluctant to issue virtual accounts for small and medium-sized crypto exchanges.

Frustrated with the inability to obtain virtual accounts, twelve small and medium-sized exchanges reportedly sent a letter to the Blockchain Association on Monday, calling for a meeting to discuss how to deal with this problem, Biz Net Times reported. An official of a small and medium-sized exchange was quoted saying:

When I joined the Association in the first place, I understood that if I adhered to the guidelines, I could get virtual accounts at the bank.

At the end of last month, 25 crypto exchanges had joined the Association for this purpose. Unable to obtain virtual accounts, these exchanges have had to either stop fiat deposit services or keep using corporate accounts for crypto transactions – a practice the Korean regulators clamp down on to avoid money laundering.

Banks Encouraged to Work with Crypto Exchanges

The government has repeatedly said that banks have “sufficient systems [and] could freely open a virtual currency real name account,” Yonhap conveyed.

South Korean Regulator Supports 'Normal' Cryptocurrency Transactions
Choi speaking at the Tuesday meeting.

Major Korean banks Shinhan, Nonghyup, and the Industrial Bank of Korea are already doing business with four cryptocurrency exchanges, Choi noted, adding that “they should do more,” Money Today reported. He further emphasized that three other banks, including KB Kookmin Bank and KEB Hana Bank, have also set up a real-name trading system. However, they are not yet issuing accounts for crypto exchanges.

Acknowledging the problem small and medium-sized exchanges are facing, Choi emphasized, “I will encourage KB Kookmin Bank and KEB Hana Bank to deal with virtual currency handling businesses.” He was further quoted by Yonhap saying:

The government will ‘encourage’ banks to make transactions with cryptocurrency exchanges.

What do you think of the Korean regulator’s announcement? Let us know in the comments section below.


Images courtesy of Shutterstock, Money Today, and Yonhap.


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Israeli Bitcoin Company Sues Banks for Not Letting it Open Accounts

Israeli Bitcoin Company Sues Banks for Not Letting it Open Accounts

An Israeli company that was created in January has gotten its business rejected by all banks in the country, and is now suing them. Without a bank account, an Israeli exchange would not be able to legally receive fiat transfers from clients, effectively preventing it from starting operations.

Also Read: Israel Tax Authority: Bitcoin is Property, Not Currency

Banking Cartel

Israeli Bitcoin Company Sues Banks for Not Letting it Open AccountsBitflash LTD, a new Israeli company which was established to provide digital currency trading services based in Acre, has asked the Tel Aviv District Court on Sunday to order all 11 banks in the country to open a current account without credit for it. The company claims that the banks’ refusal to open an account for it is in violation of the law and shows lack of good faith, as some of them manage similar accounts for competing companies.

The lawsuit states that there is a concern that the banks have illegally incorporated as a cartel and unjustifiably prevent the opening of the account to the plaintiff, thus thwarting its activity and causing it ever increasing damages on every passing day it is unable to operate. Unfortunately for Bitflash, the court ruled last year that a bank can refuse to work with a bitcoin exchange in the case of Bits of Gold vs. Leumi. However, by focusing on the banks as a cartel instead of each individually the company might persuade the court that they should not have the collective power to prevent the growth of a new industry.

Banks All Say No

Israeli Bitcoin Company Sues Banks for Not Letting it Open AccountsAccording to Bitflash, since its establishment over a month ago, it approached a number of branches of each Israeli banking corporation for the purpose of opening an account, but was outright refused on the grounds that its business in digital currencies is not to the liking of branch managers. In some of the branches the company was told explicitly that “the bank’s policy is not to open accounts for those who deal with digital currencies, regardless of the nature of the business.”

According to the plaintiff, through its attorney Alon Huberman, the company emphasized to the representatives of the banks that it has no need for credit, its account will be in perpetual positive credit balance, and that it needs only a current account that will allow the transfer of money from its clients inside Israel to its account. According to company, some of the banks justified the refusal by claiming that they would not be able to trace the source of the funds deposited in the company’s account, but even after it was made clear to them that the account would only be used to transfer funds from individuals and entities with a bank account at the same bank, removing this fear completely, they still refused.

Should banks be allowed to refuse to open accounts for bitcoin companies? Share your thoughts in the comments section below!


Images courtesy of Shutterstock.


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