Your bank may allow you to gamble your whole income on sports matches, but you can’t transact on Binance. Gambling is risky and not immune to fraud, in the same way trading cryptocurrencies isn’t. However, the technology is a great innovation in the financial sector and banks are not opposed to trading cryptocurrencies.

There is often a sense that cryptocurrency and banks are fighting each other. More and more online businesses are beginning to accept cryptocurrency payments, and more people are showing a deep interest in digital assets and talking about blockchain’s potential to replace centralized money institutions.

The Banks’ Position on Cryptocurrency Investments

Many banks restrict or ban access to cryptocurrency exchanges, including Coinbase (NASDAQ), Kraken and Binance. According to financial institutions, cryptocurrency can be used for money laundering and scams. Also, it is claimed that cryptocurrency trading platforms are opaque and incompetent when completing security checks. The banks argue that blocking crypto trading platforms protects users. However, by doing so, the banks also control customer money rights and suppress an advanced decentralized technology.

Santander (MC) and Monzo (LON), as well as HSBC are some of the banks that have prohibited cryptocurrency transactions. Barclays (LON :), TSB Metro bank and Natwest.

Santander made clear its position on crypto in a tweet (NYSE:):

“We have seen a large increase in UK customers becoming the victims of cryptocurrency fraud. Keeping our customers safe is a top priority, so we have decided to prevent payments to Binance following the FCA’s warning to consumers.”

NatWest also claimed they would lower the daily money limits that customers can send to crypto exchanges, and prohibit payments sent to digital asset firms with high levels of fraud-related activity “to protect customers from the criminals exploiting these platforms.”

An HSBC spokesperson explained the titan’s position on crypto in an email interview with DailyCoin:

“HSBC doesn’t buy or sell cryptocurrencies, just like other banks. Our Anti-Money Laundering standards and Know Your Customer (KYC), are particularly important.
We think that cryptocurrencies, as a form of privately issued money, should be regulated to at least the same standard as other forms of privately issued money, like stable coins and commercial bank money.”

The Banks’ Position on Gambling

A research paper revealed that in Australia alone, “the four major banks, accounting for 73.1% of the total lending market, allow gambling transactions on credit cards for most forms of gambling.”

The article clarified that there isn’t much evidence of banks restricting gambling, or other risky behaviors that can financially damage people. In short, gambling is allowed, and is relatively unrestricted, so if you bet your life savings in a casino game, and lose everything, there’s nothing your bank can do.

Customers can manually restrict their gambling spending to prevent them from being paid by banks. Customers can block gambling payments from their bank accounts and limit the amount they are allowed to gamble.

Flipside

• Banks don’t want to deal with the compliance issues of verifying transactions from unregulated crypto trading platforms like Coinbase.
• Gambling is a regulated industry and is law compliant, while crypto, in most cases, isn’t.

What are the reasons to care?

Blindly trading in cryptocurrency and making speculative investment can lead to significant financial loss, similar to what you would experience from gambling. Everyone should choose where they spend their money without any financial institution intervention.

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