“Use of emerging alternative payment platforms, such as Apple Pay or Bitcoin or other cryptocurrencies, can alter consumer credit card behavior and consequently impact our interchange fee income.”
So says Horizon Bancorp which provides a broad range of banking services through its bank subsidiary, Horizon Bank.
They have $7.9 billion in assets and $5.9 billion in deposits with this regional bank being the first to explicitly state that bitcoin is a risk to their profits.
“The increasing use of Bitcoin and other crypto currencies and/or stable coin and the possible impact these alternative currencies may have on deposit disintermediation and income derived from payment systems,” is one of the “risks, uncertainties, and factors that could cause Horizon’s actual results to vary materially,” the bank says, as well as:
“Potential loss of fee income, including interchange fees, as new and emerging alternative payment platforms (e.g., Apple Pay or Bitcoin) take a greater market share of the payment systems.”
Of course the bank’s loss is the public’s gain as they benefit from lower fees or from diversifying deposit risks, but allegedly some regulators are intervening against this market competition and innovation which benefits the taxpayer.
Barney Frank, the former congressman and architect of the landmark Dodd-Frank banking regulations who also sits on the board of Signature bank, which was closed last week by the Department of Financial Services in New York (DFS), accuses the latter of closing the bank for no good reason as it was not insolvent, but to send a crypto message.
“Why did they react so harshly to what they said was our inability to give them the sufficient data? I believe it was probably to send the message that even though we were doing crypto stuff responsibly, they don’t want banks doing crypto.”
DFS has denied the accusation, claiming there was a “crisis of confidence in the bank’s leadership,” but if the bank was indeed solvent, closing in does raise questions.
In addition the admission by Horizon bank now finally provides evidence of bias, which law makers and the elected will hopefully bear in mind when they are lobbied, both through the media and in private, against what they see as their competitor: crypto.
Where bankers as individuals are concerned however the story has been changing and considerably, with many of them embracing the new frontier.
Yet some bankers, like Jamie Dimon or Warren Buffet, remain viciously biased towards the entire crypto space with some regulators too often not bothering to hide their bias.
A bias no different than Blockbuster’s towards Netflix, with here too lower fees, diversification of risk and other features, including ease of global access, benefiting the public.
