DNA Brands Inc (DNAX)

[Ed the Trader]

"American Express, Santander team up with Ripple for cross-border payments via blockchain"

Financial institutions are quite interested in using blockchain for distributed transaction processing.

However, blockchain is the technology used by cryptocurrencies to track their own transactions. Cryptocurrency and blockchain are two different things.

Financial institutions do not like cryptocurrency because their pricing is so unstable. That means that there is an unacceptedly high (from the point of view of financial institutions) risk that credit card customers might try to claim that the credit card customer's purchase of a cryptocurrency via a credit card was somehow fraudulent when the customer loses huge money on the deal.

Financial institutions do not want the exposure to that risk, so they are halting further use of their credit cards for the purpose of purchasing cryptocurrencies.

Additionally, financial institutions completely shun any types of transactions that may be illegal. The director of the SEC has already stated that he feels that almost all cryptocurrencies are in violation of U.S. securities laws, and he has instructed the SEC's enforcement groups to look into that issue.

Now that China has declared cryptocurrencies illegal, how much clearer does it have to get? In a short time, all credit card issuers will ban use of credit cards for the purchase of cryptocurrencies.

However, the same financial institutions will still retain their interest in blockchain.