According to reports, the new credit card developed by tech powerhouses Apple and Goldman Sachs’ will not allow users to buy crypto. Smartereum understands that the new credit card won’t support crypto purchases. Per the report, it is understood that the decision to block crypto purchases is based on a customer agreement that was published on Goldman Sachs’ site on August 2, 2019.
According to the agreement via Goldman Sachs’ site, the new credit card should not be used for obtaining any cash advances or their cash equivalents including Bitcoin and digital currencies, lottery tickets, casino gaming chips, and race track wagers.
Apple is looking to Gather Additional Revenue from its Services business
Reuters reported that Apple’s management decided to introduce the new credit card as a part of its efforts to boost revenue from its services business. The company is known for heavily relying on tech hardware sales since inception. It is understood that the tech giant’s revenue from smartphone sales dropped by 12% in the final quarter of last year.
Goldman Sachs’ collaboration with Apple is actually focused on the development of products and services to improve the bank’s client-facing business. Although, the financial institution’s management doesn’t appear to show much confidence in the stability of cryptos.
As of August 2018, Goldman reportedly released a 42-page economic-outlook report. The report which was heavily detailed argued that cryptos don’t fulfill the three primary roles of what a currency should be. According to the investment bank, digital currencies are not really an effective means of exchange, store of value, and unit of account. The bank hasn’t really been a fan of virtual assets.
Will Goldman Sachs’ Launch a Native Currency?
Last year, Goldman Sachs’ strategy team predicted that cryptos would not retain value due to their inability to effectively function as money or real currency. But now it appears that the financial institution might be planning to launch a native cryptocurrency.
In the later part of June, David Solomon, the CEO of Goldman Sachs said during the bank could “absolutely” follow J.P. Morgan Chase and develop its own virtual asset. As of July 10, Goldman Sachs’ listed a job position for a project manager to work with its crypto-development team.
After previously removing a number of crypto-related apps, including Coinbase’s app from the App Store, Apple has announced iPhone CryptoKit during the Worldwide Developers Conference back in June. The new kit allows developers to implement various hashing, key generation, and encryption, features on iOS apps. It replaces Apple’s past software program, known as CommonCrypto.
Risk of Allowing Crypto Purchases Too High
While Goldman Sachs might now be working on projects that involve the use of digital assets, it isn’t surprising that they have decided to prohibit users from purchasing crypto with their credit card. Back in February of 2018, J.P. Morgan, Bank of America and Citigroup Inc., announced that they would no longer allow their users to buy digital currencies with credit cards issued by them.
The top financial institution has shown concerns about the high volatility of cryptos and also declared that they didn’t want to work with the “credit risk” that is allegedly involved in conducting crypto-based transactions. Whether this view is true or not remains to be seen. Everyone is entitled to their opinion on what crypto means or the risk involved and the benefits they offer.