Brian Armstrong, the CEO of Coinbase, is not pleased with JPMorgan Chase’s
choice to prohibit cryptocurrency-related transactions at its U.K. Chase UK is a division of digital banking.
In a warning to clients earlier this week, Chase UK stated that it will no longer permit its customers to buy cryptocurrencies using its debit cards or through bank transfers, citing worries about the possibility of user fraud from digital tokens.
The bank, which has conducted independent business in the U.K. stating that it was taking the action because “fraudsters are increasingly using crypto assets to steal sizable sums of money from people,” since 2021.
Armstrong stated in an interview with CNBC’s “Squawk Box” on Thursday that “every so often we see a bank in the world that decides they want to de-platform this entire industry.”
“I don’t believe that’s acceptable. That isn’t, in my opinion, the general rule in our culture. I believe that the government ought to determine what is permitted and what is not.”
The departure from Chase UK did not occur in a vacuum. Similar measures to prevent crypto transactions have been imposed by other British lenders, who cite the possibility of fraud.
Examples include HSBC’s complete ban on cryptocurrency purchases and NatWest’s restrictions on the amount of cash that may be transmitted to cryptocurrency exchanges.
Also read: Security Risks Associated With Cryptocurrency
Concerns about Cryptocurrency Scam
Due to worries about an increase in fraud, Chase UK informed its clients in a message on Tuesday that it was restricting the usage of cryptocurrencies by its customers.
data from the UK’s Action Fraud. According to a fraud reporting service, the U.K. In the most recent year, consumer losses due to cryptocurrency fraud surged by more than 40% and surpassed £300 million for the first time.
Cryptocurrencies like Bitcoin, Ether, XRP, and others are not recognized as legitimate forms of currency.
They were first developed as an alternative, online method of payment to do away with the necessity for bank accounts and other financial middlemen, but conventional financial organizations like PayPal, Visa, and Mastercard are progressively adopting them.
However, they have long been linked to criminal activities including money laundering, funding for terrorism, and illegal gambling, in part because of their pseudonymous character.
In contrast to digital fiat currency transactions, persons using bitcoin and other digital currencies don’t reveal their true identities, making it more difficult for banks to track them down in the event of questionable payments.
Approving Cryptocurrency
However, proponents of crypto assert that since FTX’s demise and countless other scandals, the sector has advanced significantly. They claim that it can legitimately integrate into regular transactions for payments and commerce.
On the other hand, the U.K. has been seeking to create regulations that would control retail crypto asset trading.
One piece of legislation with cryptocurrency-related elements is the Financial Services and Markets Bill. This particular regulation intends to include cryptocurrency assets in the regulatory framework. However, it is not a complete regulation that addresses cryptocurrency through specific laws.
Andrew Griffith, the Economic Secretary to the Treasury, claimed that the U.K. in an interview with Arjun Kharpal of CNBC. might enact a legislation relating to cryptocurrency by April 2024.
In an effort to lure businesses, jurisdictions from Singapore to Dubai have begun positioning themselves as crypto-friendly locations.
While everything is going on, the U.S. has adopted a strict stance on cryptocurrency firms, ramping up enforcement action against businesses.
Armstrong recommended the United Kingdom. The government should pay attention to Chase UK’s decision to forbid cryptocurrency payments, even if he acknowledged the nation’s aspirations to become a “Web3 and crypto hub.”
