Currently, not a lot of traditional banks and financial institutions accept Bitcoin as a method of payment. In fact, a handful of major banks in the US such as Capital One and Bank of America prevent their bank users from using credit cards, wire transfers or ACH transactions to buy cryptocurrencies.

Because they consider the price of Bitcoin to be unstable and insecure, the majority of US banks have decided not to provide cryptocurrency services. Since Bitcoin is more secure and stable than quite a few conventional currencies, their worries about cryptocurrency price fluctuations and fraud threats are mostly unwarranted. The limited supply of Bitcoins in circulation prohibits money from being generated out of nothing, and the blockchain makes it exceedingly impossible for theft or money laundering to take place.

Additionally, unlike banks, outside parties cannot control Bitcoin or other cryptocurrencies. Decentralization reduces human and outside interference, which aids in removing biases. Banks, on the other hand, have a high degree of centralization, which allows them to decide things that affect their customers without getting their permission. While centralization isn’t always a negative thing, these systems are prone to human mistakes. This is even more so when greed is present.

However, because there were no government guidelines detailing the proper ways that banks should manage cryptocurrencies until relatively recently, the worries of US institutions are somewhat warranted. The OCC in the United States (Office of the Comptroller of Currency) oversees the operation of all national banks. A bank might possibly suffer substantial reputational and financial loss if it violates the OCC’s requirements. Many financial institutions and banks have avoided using alternative currencies for fear of getting into trouble since the OCC has been largely mute on the subject.