In the Netherlands it is still possible to purchase bitcoins or other crypto coins with a credit card. In America this is no longer possible with most cards.
Three major US banks have banned the purchase of crypto coins using credit cards. This trading method is very popular in the US. Many Americans purchase the digital coins on credit instead of with their savings or assets.
Mastercard sees considerably more transactions
In January, Mastercard, one of the major credit card brands, registered no fewer than 22% more transactions. Society says that the trade in bitcoins has an important share in this growth.
The banks Citigroup, Bank of America and JPMorgan Chase no longer want to lend or advance money for this, as they actually do with the credit cards they issue. The British bank Lloyds is now also stopping this. Two major US credit card providers, Capital One and Discover, have already imposed a blockade.
The big banks decided to take action this week after the huge dive of the bitcoin. Since December the value of the digital currency has more than halved.
A bank runs the risk that many credit card loans used to purchase crypto coins will not be repaid. Certainly if those coins suddenly become worth less.
You can still buy bitcoins in the Netherlands
The Dutch banks do not impose any restrictions. This is according to inquiries from the Financieele Dagblad at ING, Rabobank, ABN Amro and SNS earlier this week.
You are free in what you buy with your credit card, as long as you stay within your spending limit. And if you buy something, you do so at your own risk, the banks say.
Financial watchdog AFM, however, points to the danger of crypto coins, just like the European Central Bank today.
Buying bitcoins with a credit card is not recommended. You will actually invest with borrowed money, and that entails an additional risk.
Mastercard can block purchase of bitcoins
Even though Dutch banks do nothing, the government can intervene to protect consumers. Mastercard itself could also impose a cryptoban. The credit card company can easily block transactions on crypto exchanges, if it so wishes.
This also applies to Visa and American Express. But none of the three major credit card brands indicated that they would consider this.
More than half a million Dutch people invest in crypto coins
According to new figures from Kantar TNS research agency, the Netherlands has 580,000 crypto investors. 65,000 households only entered in 2018.
The average crypto investor is 38 years old. That is 20 years younger than the average traditional investor.
A quarter of Dutch crypto investors invest more than a thousand euros.