BMO the latest to join financial institutional ban. So, the question is…why?
Traditional Canadian lending institutions are not falling in line with the current cryptocurrency rage. Just days ago,
BMO Financial Group (Bank of Montreal) announced they would ban their credit and debit card customers from partaking in cryptocurrency purchases with their cards. According to
decentralpost.com, this makes the BMO the latest Canadian bank to make a move against the digital currency trend. Now, Canadian investors looking to buy cryptocurrencies are increasingly forced to look at a other options to facilitate their purchases.
The Bank of Montreal is just the most recent major Canadian bank to issue a ban for its customers. Last month,
Toronto Dominion (TD Bank) blocked its customers from buying digital currencies. Recently,
Royal Bank of Canada (RBC), the country's second-largest bank by assets, determined that it would allow cryptocurrency transactions only ‘in limited circumstances,’ although it did not ban digital currency purchases for its users outright.
Even while the major lenders have issued bans on digital currency transactions, Canadian cryptocurrency investors have already looked to other means. Over the past three weeks, P2P platform
LocalBitcoins has seen trade activity increase six-fold, from $1.2 million in trades to $7.2 million, as compared with the prior three-week period.
Cryptocurrency supporters contend that the bank ban may, in fact, have a positive impact. After all, digital currencies like
Bitcoin are predicated on personal investor freedom. If investors must look outside of banking institutions in order to conduct these transactions, the thinking goes, they’re benefiting by removing themselves from the traditional banking systems, if only in part.
Canadian cryptocurrency investors remain free to conduct transactions across decentralized exchanges. For example, LocalBitcoins has been in existence for roughly six years and is designed to facilitate the connection of Bitcoin buyers and sellers on an open, peer-to-peer exchange marketplace. Critics argue that decentralized exchanges can place cryptocurrency investors in an environment of heightened risk and, without the security of a traditional bank or similar financial institution investors, place themselves at risk of becoming victims to fraud, theft, or
hacks.
Regardless, the worry does not seem to be enough to dissuade Canadian cryptocurrency enthusiasts for the foreseeable future.