Credit Card Issuers Now Charging Cash Equivalence Fees On Coinbase Purchases

Governments all around the world appear to be cracking down on tax evasion and anonymity as it relates to cryptocurrency. Banks now want a piece of the pie too. It appears the way to get in on the action is by changing Merchant Category Codes associated with Coinbase transactions.

A Merchant Category Code is a four digit number assigned to merchants. It allows businesses to be categorized by the types of goods and services they sell. It’s a way for tax agencies like America’s Internal Revenue Service and Canada’s Canada Revenue Agency to keep tabs on businesses.

A cash equivalence fee is an immediate charge to a credit card that acts as proof of purchase of another secure financial instrument. A secure instrument could be foreign currency, poker chips lottery tickets, traveler’s cheques and now, cryptocurrency.

Source: CCN