No doubt that the first day of February was a rough one for Bitcoin investors, with the crypto falling below $9,000 a couple of times. In fact, the crypto has struggled to stay above $11,000 all week.
Well, on top of dealing with the price declines, Bitcoin traders who use Coinbase learned Thursday that it had started processing payments as cash advances, which will likely cost them more money in fees.
While the change reportedly took effect for customers in the U.S. and Canada a few weeks ago, Coinbase made a public statement confirming it Thursday, according to Market Watch. Some Bitcoin traders already knew, and took to Reddit about two weeks ago to voice their concerns.
This is just of one of a few bad news changes crypto players have been dealing with since the beginning of the year.
The change has to do with something called a Merchant Category Code.
Here’s a statement from Coinbase.
Recently, the MCC code for digital currency purchases was changed by a number of the major credit card networks. The new code will allow banks and card issuers to charge additional ‘cash advance’ fees. These fees aren’t charged or collected by Coinbase. These additional fees will show up as a separate line item on your card statement.
Rough start to year
Coinbase’s actions come as the cryptocurrency space is increasingly being shunned by everyone from financial institutions to Facebook.
According to The Wall Street Journal, Capital One Financial Corp. has banned customers from using their credit cards to buy Bitcoin or tokens on the Ethereum Blockchain. The reason given was the bank was trying to limit “mainstream acceptance and the elevated risks of fraud, loss and volatility.”
In our exclusive interview with Todd Kandaris of Blockchain consultancy and development firm, Stepwyze, Kandaris said that Facebook may be turning “obsolete in their thought process” because it is trying to enforce a centralized vision in a decentralized future.
Here’s a quote from Kandaris:
“Facebook is going against its own principle of promoting social freedom. [The ban] works against their interest. If you think about it, if there is a prevalent movement in one direction and if any entity chooses to go against that for whatever reason, they face an existential threat. They may become obsolete because the world wants to go one way, and for whatever agenda they may have, they do not see that, they are working against their interest.”
Sign of the times
Observers of the space see these actions as just the tip of the iceberg. We saw the beginnings of the crackdowns last year when China shuttered crypto exchanges.
On Thursday, India’s government said that it would not deem crypto-assets as legal tender, adding that it would take “all measures to eliminate” their use as part of a payment system.