Unsurprisingly, Twitter recently learned that an Italian bank is firmly opposed to wire transfers to cryptocurrency exchanges. The fact that banks do not have much sympathy for exchanges, their direct competitors, has been known for some time. However, what sparked the community on Twitter was a screenshot of a conversation between a customer and the bank's support. The subject of the conversation would leave anyone perplexed: the support was advising the customer against making movements to the exchanges due to the fact that these would conflict with the bank's policy, under penalty of forced closure of the account. It goes without saying that this reaction was followed by many others by exponents and influencers, who feel indignant at the behavior towards the investor.
Read Also: Banks Vs Cryptocurrencies
Why do banks thwart exchanges?
Those who know cryptocurrencies are well aware of how much they have innovative characteristics, something that Fiat money does not have. Furthermore, in the eyes of an investor, there are countless opportunities for income by holding crypto, which cannot be said about having a bank account. Indeed, sometimes the investments proposed by the banks have very low rents, which barely cover the taxes to be paid on the surplus. Services such as BlockFi or Celsius Network, but also those offered by centralized Exchanges such as Binance (on Binance Earn), are absolutely more profitable, offering an annual rate of around 10% on stablecoins. This is to say that if an investor held his savings on any of the aforementioned services, in the form of dollars, he would receive five or ten times the yield on the same liquidity offered by the bank. This is why more and more retail investors are moving towards cryptocurrencies and banks, unable to compete or avoid all of this, try to hinder them.
Is it lawful to do so?
It must be borne in mind that the centralized exchanges operating all over the world and also the CeFi companies are regulated entities and therefore their work is legitimate. If a bank prohibits the movement of its customers' funds (thus contrary to their will) to a legitimate entity, then it is operating a discriminatory policy. If there was a list of entities to which a certain bank prohibits transfers and a customer accepted it when opening an account, it would be legitimate. In the Italian case, however, the bank's policy did not provide for any of this. Was it a lack of transparency?
My final thoughts
Lawful or not, many banks are opposing cryptocurrencies around the world. The most used excuse is that they do this to "protect the client from risky investments" and in part they may be right. Despite this, I firmly believe that a person should be free to use their savings as they see fit.
There are banks that have recognized the value and possibilities that cryptocurrencies offer. Some of these, therefore, have decided to integrate and help the client invest responsibly. This is the case, to name one, of N26, whose founder recently told the Financial Times that their plans include the opening of a crypto trading service.
Therefore, it cannot be generalized by saying that all banks are against cryptocurrencies, but it can be said that there are few companies driven by far-sighted people. These administrators are the ones who have glimpsed value in cryptocurrency projects, and their company will certainly play a pioneering role.
And what do you think about central banks?
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