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According to a customer agreement released last month, purchase of cryptocurrencies through The Apple Card will not be permitted. The credit card service is a collaboration between Apple and Goldman Sachs. The customer agreement was published on Goldman Sachs website on August 2.
The new credit card service in collaboration with the banking giant Goldman Sachs is part of Apple’s new initiative to launch projects that can help bring in revenue through service offerings. The efforts to diversify Apple’s revenue streams come after a 12% decline in Apple’s iPhone sales.
The drop in revenue generated through smartphones sales has long been predicted. Apple’s heavy reliance on iPhone smartphones has caused the company to take a step back and reevaluate its preferences moving forward.
Goldman’s partnership with Apple is a step towards customer-facing business that the company has been keen to establish. The customer agreement terms cryptocurrency to be ‘Cash Advance or Cash Equivalents.’
The customer agreement states:
“‘Cash Advance and Cash Equivalents’ means any cash advance and other cash-like transaction, including purchases of cash equivalents such as travelers checks, foreign currency, or cryptocurrency; money orders; peer to peer transfers, wire transfers or similar cash-like transactions; lottery tickets, casino gaming chips (whether physical or digital), or race track wagers or similar betting transactions.”
The agreement goes on to establish that transactions that include these ‘Cash Advance and Cash Equivalents’ are forbidden through the Apple Card.
Banks and Crypto: It’s Complicated
Apple and Goldman Sachs are just the latest in a long list of banks and institutions that continue to put up a fight against the broader adoption of cryptocurrencies and blockchain. One major concern of banks that causes them to attempt stopping cryptocurrency purchases is the digital assets’ volatile prices. Banks fear that a sudden and sharp decline in cryptocurrency prices could cause customers to fall into debts that they cannot repay.
It is important to mention that another leviathan from the banking industry, JPMorgan Chase, is currently facing a class action lawsuit that directly addresses this issue. The lawsuit would be integral in deciding whether cryptocurrencies fall under the same category as other cash advances. A number of motions to dismiss by JPMorgan have been denied as the judge believes that the prosecutors’ interpretation that cryptocurrencies do not fall into the same category is plausible.
It will be interesting to see how Apple and Goldman Sach’s policy might be affected if JPMorgan would lose the class action suit.