International banking institutions have been limiting their customers’ interaction with accounts associated with cryptocurrencies. With this trend in place, the Bank of Montreal has adopted a different but conservative approach towards this crypto economy.
The bank has gone ahead to restrict users from using their own money to make crypto purchases. It has blocked debit transactions with crypto platform through Interac Online Payment as well as Mastercard. According to the bank circular, this decision was made so as to protect the security of the bank and that of the clients.
This trend is rife in Canada with banks initiating processes that are geared towards limiting their customers’ ability to transact with accounts associated with cryptocurrencies.
For instance, Scotiabank has blocked Credit and Visa related purchases of cryptocurrencies. Also, Toronto-Dominion Bank is now preventing its customers from purchasing crypto assets using their credit cards. According to the bank, these purchases could lead customers to pile debts that they may not be able to repay.
The move by the banks in Canada is not new. Big banks around the world have made efforts to restrain their clients form purchasing crypto assets by way of credit cards. Banks such as Citigroup, Commonwealth Bank, and Danske Bank have been restricting their clients’ ability to buy crypto assets, sometimes freezing their accounts without prior notice.
However, Canada’s crypto savvy community has found ways around these restrictions. People have turned to local forums and trading posts like LocalBitcoins and this has seen a dramatic increase in traffic this month.
Banking institutions have all along underestimated the resilience of the Bitcoin market. Peer-to-Peer exchange portals, Bitcoin ATMs, and local credit unions have provided investors with alternative channels to exchange fiat for cryptos. As long as the cryptocurrency demand remains as is, businesses providing crypto services will continue to flourish.
However, not all financial institutions have taken this negative route regarding cryptocurrencies. TMX Group, the operator of the Toronto Stock Exchange, recently announced plans to launch a cryptocurrency exchange desk. TMX Group subsidiary, Shorcan Digital Currency Network, has partnered with Paycase Financial in a bid to create a specialized brokerage service for cryptocurrencies.
Shorcan is planning to start with Bitcoin and Ethereum in Q2 of 2018. It will utilize Paycase’s data aggregation services to build technology that will bring common stock trading data benchmarks and indices to a new platform.
TMX Group has a history of adopting the emerging crypto sector. Like last year, the firm announced its approval for public trading of Hashchain, a major trustware provider for decentralized financial services, alongside eight other cryptocurrency related startups. The Canadian fintech environment is set to impact the Canadian Stock Exchange positively as more than 50 blockchain and cryptocurrencies get listed on TSX this year.
The Canadian government’s attitude towards the crypto economy remains positive all through. This has portrayed Canada as responsive to its citizens’ needs, providing a secure and transparent system that foster trust and accountability in bureaucratic procedures.