With the recent downturn in the cryptocurrency market, banks are starting to announce that they would no longer support Bitcoin purchases with credit or debit cards. These types of declarations are garnering attention fro the crypto community as more and more prominent banks – like Capital One – are denying Bitcoin transactions. So finding a Bitcoin friendly bank can be problematic.
Financial institutions reference the higher risk of loss and fraud, along with lack of mainstream acceptance as main concerns with accepting Bitcoin. Additionally, many voice concern with the inherent volatility with the digital currency market.
For a while now, customers have brought forth complaints about banks denying credit card purchases for altcoins. The problem is that these financial institutions do so covertly instead of openly admitting it. These recent proclamations have made it clear how the financial industry feels toward cryptocurrencies.
The question a lot of investors are left asking is, why it happened at all? Many also ask themselves which banks they can use for Bitcoin. Are there still banks which allow the purchase of Bitcoin with a credit card?
Why Did It Happen?
To begin with, it should probably be stated that there aren’t many financial institutions that understand Bitcoin. Banks see Bitcoin – along with other cryptocurrencies – as disruptors within the financial industry. Many prominent figures within the banking sector have been vocal about their disdain for cryptocurrencies.
Of course, the recent volatility within the Bitcoin market doesn’t help. The extended price correction which continues to drive down the digital currency has given banks just another reason to impose limitations and regulations on Bitcoin.
Letting customers purchase Bitcoin with a credit card becomes a risky endeavor for banks. The coin’s high volatility means that it may not be valuable enough in the future to guarantee repayment.
Additional Bitcoin Charges
Prior to the recent crackdown on credit card purchases banks were already indicating that they would make it more difficult to purchase Bitcoin. For instance, many credit card companies implemented a code which would give banks the option to charge cardholders an additional “cash advance” fee for Bitcoin purchases.
Exchanges do not collect these fees, nor are they associated with them. They are directly related to the banks and credit card companies and show up as a separate line item on card statements. Some banks are charging up to 24% on these fees in an effort to cash in on Bitcoin purchases. These are separate, yet in addition to, the transaction fees charged by the exchange.
The possibility that the United States may begin regulating Bitcoin sales may also have played a part in banks charging more for cryptocurrency purchases. This is all made even more complicated due to the fact that many of the financial institutions charging fees are also supporting blockchain technologies.
These banks are looking to partner with companies focusing on blockchain related projects. Several are also considering launching their own altcoin as a method to make internal cash transfers simpler and safer. All of this leads to an appearance of confusion and hypocrisy within the financial industry.
Ignoring the Crowd
The financial institutions which have stated that they will ban accounts purchasing Bitcoin represent nearly 70% of the credit card industry in the United States. This is a very large number in opposition to Bitcoin transactions. However, there are still a few options for those that want to purchase Bitcoin with their credit card.
Major players in the banking sector in Australia, the United Kingdom, and the United States have all agreed to ban Bitcoin credit card purchases. In addition to a handful of larger banks, smaller banks and online-only banks are showing their support. Some banks, like Simple Bank, are even going the extra mile with their offerings. For instance, some allow the co-mingling of wallet and exchange features.
Keep in mind, however, that it is not wise to make an investment or purchase Bitcoin online with a credit card. Purchasing securities with a credit card almost always come with a transaction fee. This effectively makes the final price on securities higher. Doing so makes it more difficult to get a positive return on your investment.
For instance, if the purchase is a loan based on funds which aren’t currently held, then using a credit card will make it harder to pay off securities. If at all possible, you should use a bank transfer or a debit card transaction for your Bitcoin purchases.
Please, however, keep in mind that this is not financial advice. Nothing prior to or after this disclaimer should be interpreted as such. This is also not an endorsement for any of the banks on our list. All listed institutions are for informational purposes only and should be treated as such.
Banks for Bitcoin
Listed below are banks that have explicitly stated that they will accept either Bitcoin or credit card transactions for Bitcoin purchases. If a bank is not on the list below, it does not mean that it rejects or does not support Bitcoin or Bitcoin purchases. It should only indicate that at the time of writing this article, verifiable information pointed to it being such. This list is as accurate as possible as of December 17, 2018.
Having said that, you may be wondering just how many banks remain which accept Bitcoin or Bitcoin purchases. There are a few banks left in the U.S., U.K., and several other countries throughout the rest of the world that buck the current trend. Let’s start with the United States.
?? United States
Goldman Sachs stated earlier this year that it plans on releasing tokenized United States dollar coins. More recently, the firm announced that it is still considering more ways to offer services that involve Bitcoin. However, no timeline has been given.
Interestingly, Goldman Sachs recently announced that it would begin to onboard new clients for its Bitcoin trading product. Although the trading desk itself has yet to arrive, the company has started signing up a few clients, which means a product is more than likely around the corner.
Goldman Sachs has long been a proponent for Bitcoin and Bitcoin trading. Now, not only does the bank allow for buying of Bitcoin, but is now implementing a way to trade Bitcoin derivatives and futures. Instead of being satisfied with allowing its clients to purchase Bitcoin, Goldman Sachs is looking for ways to bring more Bitcoin options to its clients.
Simple Bank is located in Oregon, in the United States. This bank makes a name for itself in that it works with various cryptocurrency exchanges. The bank allows its users to sell and buy cryptocurrencies however and whenever they want. Unlike some newer platforms joining the fray, deposits made to Simple Bank are all insured by the FDIC.
This is a considerable advantage for customers concerned with the reliability of digital currencies. However, keep in mind that Simple Bank does require that its account holders be United States citizens residing within the borders of the country. Citizens living abroad or foreign nationals are unable to hold accounts with Simple Bank.
USAA is another bank in the United States which supports Bitcoin. The bank is so integrated that its mobile application allows its account holders to view their Coinbase account. Its involvement may also be because USAA is the very first bank in the U.S. to invest in a digital currency exchange. USAA was a significant investor in Coinbase’s Series C funding round.
The bank also allows its users to view their balances on Coinbank via the USAA.com website. This type of support is a strong indicator that the firm wants to be an advocate for blockchain technologies. USAA is serious about the potential of blockchain and wants its users to know that it continues to search for new ways to decentralize its operations.
Ally Bank might be the most Bitcoin-friendly bank in the United States. This online-only firm offers 24/7 customer support. Its online chat feature offers quick answers and support. Account holders can quickly and easily connect their account to Coinbase. Therefore, they can purchase Bitcoin with their credit or debit card anytime they want.
Keep in mind, however, that Ally does charge a fee if you decide to buy Bitcoin with your credit card. For those interested in purchasing Bitcoin hassle-free, Ally Bank is a great option.
?? United Kingdom
Bankera is mostly known as the SpectroCoin operational arm. This financial firm wants to offer its account holders everything a fully functional bank would offer. It offers debit cards, payment processing, foreign exchange rates, and lending options to its clients. Additionally, Bankera will allow Bitcoin for use as loan collateral.
But Bankera doesn’t stop there. Earlier this year, the bank partnered with HitBTC to list its digital token, BNK. Listing and trading have since commenced on the exchange, this after more than 100,000 users contributed to its crowdfunding campaign. In addition to HitBTC, Bankera plans to list its coin on several other exchanges.
However, Bankera’s primary agenda is to establish its own platform for cryptocurrency trading. It strives to be a cost-effective, secure alternative to current exchanges while supporting major players in the digital asset industry like Bitcoin, Ethereum, DASH, and so on. BNK holders will then have the ability to trade their token for other cryptocurrencies without commission fees.
Bankera wants to create a digital bank that is relevant to the blockchain. It aims to provide crypto solutions while providing an infrastructure similar to what most conventional banks offer. Just like traditional banks, Bankera will offer savings accounts, investment products, loans, and crypto funds. This financial firm wants to bring the world of blockchain and banking together.
Barclays is a multi-national investment bank based in London, England. With over three centuries of expertise and history in the banking industry, Barclays is the epitome of financial stability. Recently, the firm filed two patents with the United States related to cryptocurrency.
First, Barclays wants to establish a method and platform for moving digital currencies to the recipient from the payer. This patent provides a wide variety of use cases based on privately and securely processing information via the blockchain. The firm expects that its merchants and account holders to be the primary beneficiaries of its system.
Second, the bank filed a patent related to the system and method which blockchain uses to record data. There were rumors that the financial giant was considering its own trading desk for cryptocurrencies, however, Barclays executives were quick to squash it. The firm does continue to look into business opportunities in the cryptocurrency world.
For instance, in early 2018, Barclays announced a partnership with Coinbase which gave its account holders the opportunity to open an account with the exchange. As a result, UK clients have an easier time buying and selling Bitcoin.
Bank of England
Bank of England is a financial firm which is performing extensive researching into technologies that support digital currencies like Bitcoin. The bank has long been voicing an interest in a central bank which issues its own digital currency. While the Bank of England is not in the process of moving toward this option, it is exploring the consequences of doing so.
In addition to allowing its account holders to purchase Bitcoin, Bank of England is also researching the possibility of launching its own Bitcoin-style digital currency. The cryptocurrency will be directly linked to sterling and would allow account holders to keep their money in digital form within the bank itself, dispensing of the need for a retail-type bank.
National Bank of Canada
National Bank of Canada, the sixth-largest lender in Canada, allows for Bitcoin purchases via credit card as well. However, the bank states that it carefully monitors these types of transactions, especially given the scrutiny with which its neighbor to the south has shown.
Although the bank does not currently have a systematic mechanism in place to block Bitcoin purchases, it could implement one soon. This may be the bank’s course of action as other Canadian banks have started restricting Bitcoin purchases.
Unfortunately, the National Bank of Canada is one of the last bastions available in Canada which allow for purchasing of Bitcoin. Many Canadian banks, like the Royal Bank of Canada and Toronto-Dominion Bank, have placed restrictions or blocks in one form or another on purchasing Bitcoin.
Fidor Bank is an online bank founded in 2009. It is based in Munich, Germany, and has a strong partnership with the German Bitcoin exchange Bitcoin.de. With this partnership, Fidor Bank can offer its customers an “Express Trade” option, which lets them instantly buy Bitcoin.
With the bank’s Smart Giro Account, users can perform all the functions of a typical bank, plus purchase Bitcoin whenever they want. Not only can users purchase Bitcoin, but with the Smart Giro Account, they can also send Bitcoin to other account holders almost instantly. Where some exchanges take hours to complete a transaction, Fidor Bank is giving users a way to do it almost instantly.
In May of 2018, Argentina-based bank Banco Masventas states that it will now provide cross-border Bitcoin payments. The firm has a partnership with Bitex, a Latin America based startup exchange. Banco Masventas will make use of Bitcoin as a way to conduct international transactions.
Using Bitex and Bitcoin gives the people of Argentina an alternative to the popular Swift method of payment. Although popular, yet costly, the Swift method needs serious updating. Using Bitex will help significantly reduce costs and increase efficiency. Transactions with Swift take 3-5 business days based on the size of the payments. Bitex transactions, on the other hand, may take only a few hours.
With the transparency and security provided by Bitex and the Bitcoin network, Argentina residents are making use of it as a method of reliable international payments. Banco Masventas is just one of several banks opting out of Swift and leveraging decentralized networks for its users.
One of the most prominent banks in Estonia, LHV Bank has been associated with emerging technologies and blockchain for the past half decade. In 2014 the bank partnered with Coinfloor to get a head start with Bitcoin. More recently it started working with Coinbase to provide banking services to its customers for Bitcoin purchases.
Just last year the bank went so far as to offer its account holders its Cuber Wallet application. With this blockchain application, LHV Bank users can send digital representations of real Euros to one another. The bank continues to look for ways that cryptocurrency and distributed ledger projects can make it a better place to bank for its customer base.
Switzerland’s Swissquote bank is an online banking service, offering its users all the services they will find with a traditional financial institution. Additionally, however, the bank has added its own Bitcoin exchange, expanding its portfolio and giving its customers greater access to cryptocurrencies.
Additionally, the bank partnered with the digital currency exchange Bitstamp. With this partnership, those that bank at Swissquote has the ability to exchange Euros or U.S. Dollars for Bitcoin right from their online account.
Mitsubishi United Financial of Japan Group (MUFG) is Japan’s second-largest bank and one that is not shy about its views on Bitcoin. Not only does the firm allow its users to purchase Bitcoin, but it’s also researching ways to launch its own cryptocurrency. The bank is bullish on Bitcoin, and cryptocurrency in general as it recently established a partnership with Coinbase.
It makes sense that one of the largest financial firms in Japan would want to offer its customers easier methods to purchase Bitcoin. Japan offers nearly a dozen exchanges whereas South Korea and China have not been so kind to Bitcoin. Additionally, Japan is one of the largest Bitcoin markets in the world, coming in nearly twice as big as the U.S. market.
Even though there have been considerable crackdowns against Bitcoin purchases by banks throughout the world, there are still several that are Bitcoin-friendly. These banks offer various methods through which their users can purchase Bitcoin. Many are going the extra mile and investing in exchanges or projects that allow for easier methods to buy Bitcoin.
The stigma is that banks don’t understand the technology behind blockchain and Bitcoin. However, as more and more banks join the fray, that trend might change. Of course, there are more than just the banks listed here, however, these are some of the more prominent ones.
Due to many financial powers and major players dragging down Bitcoin adoption, there aren’t as many banks willing to allow Bitcoin purchases. Hopefully, some of the newer startups on this list will show that there are ways to build legitimate businesses while allowing customers to purchase Bitcoin.
The banks on this list are a bridge between tradition and technology. They are showing a way for cryptocurrency to gain traction in the market while it works its ways toward mass-adoption. Of course, we just need more countries and banks to sign up.