Bank of America remains hawkish toward cryptocurrency as a form of payment, due to its disruption of the banking sector’s regulations on transparency. Cryptocurrencies present authorities with more challenges for catching “bad guys,” a company executive said Thursday.
Cathy Bessant, Bank of America‘s chief technical officer, set the tone for what she sees as two distinct uses for cryptocurrency: payments and investing. As a form of payment, cryptocurrency is dangerous because it is not in line with banking’s policies for tracking payments.
“The way we sort of quote-unquote catch bad guys is by being transparent in the financial [movement] of money,” she said, speaking from CNBC’s Capital Exchange breakfast series in Washington, D.C. “Cryptos is the antithesis of that.”
“As a payment system, I think it’s troubling, because the foundation of the banking system is on the transparency between the sender and the receiver, and cryptocurrency is designed to be nothing of the sort. In fact [it’s] designed to be not transparent.”
Casting cryptocurrency in a good guy vs. bad guy narrative is a common theme for traditional banks and investment funds. Executives undervalue key pain points that cryptocurrencies attempt to resolve in the financial sector (such as slow payment settlement and transaction fees), while sounding alarm bells for criminal activity. As CCN.com reported, Berkshire Hathaway VC Charlie Munger said Bitcoin was almost as “bad as trading baby brains.”
Though Bessant does not see legitimate use cases for crypto as a form of payment, customers can still invest in cryptocurrencies such as bitcoin — just not with Bank of America-issued credit cards. BofA views cryptocurrencies loosely as stocks. Their customer policies thus reflect this line of thinking.
“Just like we don’t allow stocks to be purchased on our credit cards, we’re not going to allow cryptos or other currencies to be purchased on our credit cards,” Bessant said.
So while some banks classify concurrency payments with credit cards as cash advances (with high fees), BofA doesn’t allow them at all.
As regulations for cryptocurrency are still in early stages, BofA stands out as a financial giant with a tough stance on the debate. To BofA it seems that the cryptocurrency space is full of hackers and modern day Robin Hoods. However, the bank is making improvements towards security every day, according to Bessant.
“Awareness is higher, the sophistication of our defense and detection efforts are growing every day. There are more players in the mix with a lot of expertise, and the threat environment is beginning to show patterns that make prediction and even automated prediction something we can do every day. So I do believe we’re in a better place,” Bessant said.
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Last modified: May 20, 2020 8:48 PM UTC