Europe was, until recently, one of the most friendly zones for trading, exchanging and even creating new cryptocurrencies. Boosted by the SEPA payment system, participating in the crypto market was easy for Europeans, who have unlimited banking access, as well as some spare wealth after years of excess liquidity.
But one by one, banks are showing a distaste for servicing the cryptocurrency ecosystem, following in the footsteps of Asian banks. At first, it was a few banks in Bulgaria, subsidiaries of Western banks, who refused to service local exchange services, and sometimes block SEPA transactions for payments on Kraken.
More recently, Royal Bank of Scotland (RBS) has refused to provide services to Gibraltar companies dealing in cryptocurrencies. In an unfortunate move, Gibraltar has seen its position as the crypto hub of Europe undermined.
Some firms, including Bitfinex, have resorted to using Polish banks. Dutch banks also seem friendly, and several of them provide services for the small-scale Gulden cryptocurrency project.
In a much more serious move, several crypto-related cards, such as WIREX, have seen their banking counterparties refuse services. According to WIREX and TenX, the fault lies in Wavecrest, the intermediary between the cards and the VISA system.
#TenX advisory: Following an urgent communication from our card issuer WaveCrest, payments on the TenX card will be unavailable. We are working on a solution and will let you know further details as soon as we have them. We apologise for the inconvenience.
The problems related to using the VISA system via the services of Wavecrest have also affected Bitwala, Bitpay, and Xapo. The Monaco project, however, has seen no problems so far with its cards, and continues to issue new plastics.
There is no indication when the services may resume, and this move has undermined some of the faith in bridging cryptocurrencies and fiat. Cards were seen as an important step for everyday usage of crypto funds. However, the VISA system put centralization back in the game and exposed crypto companies to risk.
Following an announcement from our card issuer on behalf of Visa Europe, Bitwala cards are taken out of operation starting today. Our team is holding an emergency meeting to resolve the issue with the card holders best interest in mind and will make an update shortly.
All the while, reports of failed or slowed SEPA transactions from Coinbase have added to the picture. Over the years, there have been other similar reports, but as the value of cryptocurrencies rises, the inability to move back to fiat is becoming more worrying.