Well imagine if you ran up you credit then decided that you didn't want to pay it. You could potentially just obfuscate your transactions or convert into a privacy coin then claim trading losses when you declare bankruptcy.

The banks are also protecting themselves from a credit bubble whereby people begin defaulting on credit cards used to rack up crypto purchases. Left with little to no other options people will resort to taking out cash advances on their credit lines instead- which are given at a much higher APR than regular charges.

Protects banks and lines their pockets with even more cash.