Banks and why they are blocking their customers from buying crypto

I thought I would share a plausible reason why banks are blocking their customers from buying crypto. It might be time to dust off my tinfoil hat, hopefully, you got yours ready as well. =)

Disruptive innovation

In order to set the stage I first think it is prudent to give everyone the prerequisite facts needed in order to be able to draw the proper conclusions. A conclusion I have 0.000000003% doubt in that you will not share with me after reading this post. Every once in a while there comes along either a certain someone or a certain innovation that fundamentally disrupts and changes the entire playing field. The most recent example of this is the single-purpose AIs that currently have many people and sectors thinking and wondering about what the future will hold for them.

And if we look in the rearview mirror we can also see some other examples of this. One of the bigger and more recent ones would be the Internet. It has changed almost every facet of our modern society. Everything from how we shop, to what we can shop. What information we have access to and our ability to learn things to how we consume and listen to music. And the list goes on and on. But that is just some of the things, the list is much longer. But I think you get the point.

I would argue, and I hope you will agree with me thee, that cryptocurrency and blockchain technology are one of these disruptive technologies. However, it is not as broadly disruptive as let us say the internet. But its disruption is to the financial system and it directly affects our ability to do transactions as well as it has an openness to it no banks share.

Banks stopping customers from buying crypto

Now we are finally getting to the good part, after that brief history lesson. The very reason I see banks stopping their customers from buying crypto is not to placate any government. At least not directly, that is more of a bonus side-effect. Instead, the very main reason is much more simple. It is to eliminate their direct competition.

If we look at it from the banks' view, they have the very power to directly stop their own customers from using their very competition. As far as I know, this is a situation that is unprecedented. At least I can not think of any time where this has happened. There have been instances where businesses have colluded and formed monopolies. And while that is illegal, in most cases. It is very far from the same. Monopolies more to affect prices and make the competition charge the same as you do. Making the customers' choices mute. It does not stop the customers from being able to pick someone else if there is one.

If you were running let's say a bookstore back at the end of the 1990es, and you were able to stop customers from using that disruptive upstart company named after some forest in South America or some old Greek warrior woman, Amazon. Would you not do so? I think the vast majority of companies would. Especially now more than ever. As the moral backbone seems to have disappeared in proportion to greed and profits going up. And the list of companies selling out their customers all for the mighty dollar seems to grow to endless proportions.

This is why I think that assuming that banks are more than happy to stop their customers from using a disruptive competitor makes sense. And if they can placate their local government at the same time, that is just a win-win in their book. But the absurdity of the situation is even bigger than the banks just stopping you from using a competitor to them. Under the guise of "protecting you" from scams and frauds.

If we then use their logic people should really be stopped from using banks. As they are often targeted by scammers. Tricking elders into sending them money or draining their bank accounts. But I guess that type of logical conclusion would be very counterproductive to the banks. Similarly, I do not know of any bank that stops its customers from buying stocks in one of the many companies that are destroying our planet. But I guess the human race dying has to take a backseat to protect their customers from potential scams and frauds.

A second argument for why

There is however a second argument for why the banks are stopping their customers from buying crypto. And this one ties in into the war on crypto that is currently being fought by primarily the US. Where they more or less are trying to kill off the entire crypto industry. This is because it very much is in line with their own agenda to kill off crypto. Not only because it is a direct competitor when it comes to banking and transfer of funds. But it is because they are a direct competitor to the banks when it comes to basically every argument used against crypto.

Buy your first crypto and get a pair of handcuffs for easier processing down the line. I presume that is what the banks think crypto should be like

Do you want me to say that again? Sure. Every argument used against crypto is a reason why banks want to get rid of crypto. Crypto is being taunted as a place where everyone is a criminal and only uses it to launder money. PRey tell where is one of the premier places that criminal washes money, the banks. And we can just take a look at the Danke Bank case, the largest money laundering case in history. Where they over eight years launder ~$300 billion, adjusted for inflation. That is a staggering amount of money. But surely that is just one bad actor. Well if you do some googling you will end up with a very long list of banks that are or have laundered money. And the kicker, Danske Bank is still operating and doing fine. They had to pay a little fine but then it was back to business as usual. Hopefully minus the laundering tho.

Let us take a look at another one of the classic and commonly used arguments. When everyone in crypto is not laundering their money, they are using crypto to evade paying their taxes. Tax evasion is probably the most used argument by governments why crypto is bad. I wonder how people evade tax without using crypto. I am not even sure it is possible to evade tax without using cryptocurrencies to do so. What is that? You have gotten a lot of papers from someone in Panama you say. Oh, would you look at that? Banks helping the rich to set up shell companies to avoid paying taxes. I guess I was wrong then, tax evasion is a thing. Say again? Apparently, several banks, stock traders, and lawyers in the EU across several countries were involved in organized tax fraud involving stocks. But don't worry it is no way near as large sums of money as the money laundra scandal Danske Bank where involved in. Here we are merely talking about at least $64 billion.

What do you mean that's not how it is done? The bank told me I needed to launder my money before I could use it

And the list goes on and on. But I hope you get the picture. So not only does crypto compete with the banks' "legitimate" business. But if we believe the critics crypto is a direct competitor of the banks when it comes to the very lucrative side of helping the very rich either evade taxes or launder their money. And this is why I would argue the banks' true motives lie in stopping people from buying crypto. If there is one thing I have come to suspect it is that if there are financial illegalities going on, and as soon as the sums of money is crazily large, there is always at least one bank involved.

And while this is a young and cheap post, or is it? I can not but help to wonder if there is a grain of truth to it all. As the saying goes you don't kill the goose who lays the golden egg. Hopefully, I have at least been able to make you crack a smile or perhaps even laugh a little over it all. I do very much like to hear if you perhaps have any insight and thoughts on this topic. The comment section is yours.

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