Canadian Banks Start Imposing Ban on Crypto Purchases

Due to the increased volatility on crypto markets and the severe ongoing correction, banking institutions have started limiting the cash outflows specifically for crypto purchases. Over the past few months, several banking institutions in Canada have joined the global club of lenders and credit card issuers who have introduced a ban on crypto transactions.

The latest financial institution to impose the ban is BMO Financial Group (Bank of Montreal) which has now put a ban on crypto purchases made by its customers using its credit or debit cards. This matter recently came to light when one of the bank’s employee uploaded a staff bulletin on Reddit which states that the bank would block all the online payments including debit and credit to the crypto exchanges.

The leaked bulletin states: “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 the major reasons for this decisions is in tune with other lending institutions who have expressed fear around the extreme volatility shown by the crypto markets. The bank notes: “This decision was made due to the volatile nature of cryptocurrencies and to better protect the security of our clients and the bank.”

The major fear is that if customers end up making too many purchases over their appetite to repay the banks again, it will put the banking institutions in a big mess.

Hence many of these financial institutions think that putting an outright ban on crypto purchases is one of the best ways to solve all the future problems. However, there are many other analysts and crypto enthusiasts who have criticized banks saying that the banks are in absolute fear of an alternate financial system being developed that would reduce their dominance.

However, BMO is not the first banking institution to have arrived at this decision. Last month, Canada’s largest bank Toronto-Dominion Bank (TD Bank) has blocked all routes for its customers to make crypto purchases.

On the other hand, the second largest bank - Royal Bank of Canada (RBC) - has said that it would continue to allow users to buy cryptocurrencies, however, only under “limited circumstances”.

Prior to banks in Canada, several banking institutions from the U.S and across Europe have been seen taking a similar stand since the crypto market started correcting significantly since the beginning of 2018 and the crypto purchases shot up exponentially.