It should be of little surprise to any of us at this point, but the big banks in Canada have begun fighting back against the growing popularity of cryptocurrencies, and now they’ve taken the fight directly to the consumers. In the last three weeks, both Toronto Dominion (TD) and the Bank of Montreal (BMO) have limited or banned the purchase of cryptocurrencies with bank provided debit and credit cards and, as might be expected, customers are more than a little displeased with the developments. Some individuals, and one Redditor, in particular, have gone as far as to close their accounts in protest of the new policies.
As far as what those policies are, Toronto Dominion has stated that they have completely banned the purchase of cryptocurrencies with their debit and credit cards. The Bank of Montreal has taken a slightly softer approach, stating that they will be allowing transactions that involve digital currencies, but only in limited circumstances
Why is the TD and BMO Cryptocurrency Ban such a Problem for Canadians?
Unlike the United States and some other fully developed nations, Canada offers a relatively limited selection of banking options. Besides the credit unions, Canadians are basically forced to work with one of the five major banks. These are Royal Bank of Canada (RBC), Toronto-Dominion Bank (TD), Bank of Nova Scotia (Scotiabank), Bank of Montreal (BMO), and Canadian Imperial Bank of Commerce (CIBC). Right now those that wish to participate in the cyrptocurrency markets can simply move their business to Scotia, RBC, or CIBC, but there’s no guarantee that those banks will be open to digital currencies for any considerable length of time. A movement may just be a stop-gap.
LocalBitcoins as an Alternative
Users are, however, not allowing themselves to be bullied by the policies of the big banks and they are finding alternative ways to get their hands on digital coins. The most popular alternative so far, it seems, has been the website LocalBitcoins. We featured the website in our article, Where to Buy Bitcoin in Vancouver, but they hardly seem to have needed the exposure. According to news outlets, the trading volume on the website has increased 600% over the last few weeks, making them responsible for more than $7 million in cryptocurrency transactions in under a month. The increased use of the website not only shows the resiliency of those committed to the crypto cause, but it also proves that the digital community can get the job done without the intermediaries that cryptocurrencies set out to eliminate in the first place.
Coinsquare as an Alternative
One of the best alternatives for Canadians that don’t want to ditch their Toronto Dominion or Bank of Montreal accounts is Coinsquare. They are a web-based cryptocurrency wallet and exchange operation that allows their customers to use such a wide variety of deposit methods that clients with accounts at any Canadian banking institution will have an easy time purchasing digital coin. One of the most popular options that they offer is the opportunity to fund your account through Interac e-Transfer. Some LocalBitcoin sellers also offer this option, but the hoops that customers have to go through with them make the transaction enormously unattractive. With Coinsquare, you tell them you want to fund your account through Interac e-Transfer, they give you all of the details you need to set the transfer in motion, and in a day the money you transferred is in your account. It’s easy, secure, and free from intrusion from Canadian banking policy makers.
The Ban is Similar to the Online Gaming Bans made by Canadian Banks in the Early 2000’s
If this sounds familiar to anyone, it’s probably because we’ve lived through this before. It’s the same thing that happened when online gaming became popular between 2000 and 2008. Not wishing to involve themselves in the legal grey areas presented by a new digital frontier, the big banks in Canada began wholesale banning transactions that even smelled as though they were related to online casinos, sports books, or poker rooms. This resulted in the growth of popular third-party transaction facilitators such as Neteller and Paypal. The increased popularity of a service such as LocalBitcoins is just the natural response to this kind of behaviour and if history repeats itself, there will be many more services coming online in the near future that will allow people to buy cryptocurrencies face to face with cash.