Back in January this year, Stripe (an off the shelf online payment provider for websites and mobile apps) announced that they would be dropping support for transacting in bitcoin and that they would only accept payments made in standard fiat currencies going forwards.
Diving a little deeper, Stripe gave the following reasons for this move which on the face of it, seems entirely logical:
- Bitcoin valuations are more inline with financial assets such as gold or real estate.
- Market volatility is too high often leading to failures, where the wrong amount is received due to price fluctuations, during the time it takes to process a transaction.
- Fees have also risen substantially, where a single transaction a fee of tens of USD is common making it comparable to expensive bank wires.
In addition to this, shop owners need to keep on top of inventory pricing and unless there is a programatic way to keep tabs on this via an API, it makes transacting in bitcoin not very practical at all. But I always wondered why they didn't simply choose another coin that was relatively more stable.
Well I now I believe I have my answer... Today while scrolling through the endless recommendations on my YT feed, a post from Chris Coney (@The Cryptoverse) caught my attention; a shift in wind direction.
Chris runs the Cryptouniversity website which offers a number of online training courses for people new to the market, presumably looking to become the next crypto millionaire. The courses can be purchased with fiat (via the Stripe platform) or with Bitcoin, though it's probably no surprise that 95% of all transactions are conducted with fiat currencies, given that the courses are mainly for people new to the industry.
What is surprising however, is that 3 days ago Stripe served Chris with a notice of service termination on the grounds that his website is in violation of the Stripe Service Agreement under the Prohibited Businesses & Activities section (https://stripe.com/us/prohibited-businesses). Stripe in their email referenced the following as the particular violation clause:
Virtual currency that can be monetized, resold, or converted to physical or digital products and services or otherwise exit the virtual world (e.g., Bitcoin); sale of stored value or credits maintained, accepted and issued by anyone other than the seller
Well ok, fair enough. But that should be no problem, the website sells only courses and doesn't sell any virtual currencies, which Chris explains in his response to Stripe. But then Stripe responds most curiously:
While I understand the distinction you're making, our financial parters do not currently allow us to support any businesses that are related to the cryptocurrency/virtual currency industry - this includes business and organisations that are not directly selling this service but would instead provide information and resources to individuals who would be using or selling cryptocurrencies....
Wow!... That's quite some distance away from where Stripe were positioned towards the end of last year. They've done a complete U-Turn on support for the crypto industry and now won't even associate themselves with 3rd party organisations that endorse, or even talk about it for that matter.
That seems to be quite the draconian policy, though granted it could be to protect themselves from what they perceive as future risk however, if this becomes a trend and service providers across the board begin to align their policies in a similar manner then I couldn't help but feel like this is a bow shot, aimed squarely at those directly supporting the crypto industry and those choosing to operate 'outside' of the traditional financial system (i.e. illicit business activities).
Conversely, it might also be a big fat nothing burger; but it's definitely worth keeping our eyes on it, we'll see how it develops.
UPDATE:
I contacted Stripe for an official response and they replied with the following:
While we can’t support cryptocurrencies due to restrictions from our financial partners, we can support businesses who only offer educational resources. Selling or using cryptocurrency in combination with Stripe would be prohibited.
Hmmm... A discrepancy here then?
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