News Banks ban cryptocurrency buying with credit cards

Banks ban cryptocurrency buying with credit cards

-

- Advertisment -

(Reuters) — Banks in Britain and the United States have banned the use of credit cards to buy Bitcoin and other “crypto currencies”, fearing a plunge in their value will leave customers unable to repay their debts.

Lloyds Banking Group, Britain’s biggest lender, said on Sunday it would ban its credit card customers from buying crypto currencies, following the lead of U.S. banking giants JP Morgan Chase & Co and Citigroup.

The move is aimed at protecting customers from running up huge debts from buying virtual currencies on credit, if their values were to plummet, a Lloyds spokeswoman said.

Concerns have arisen among credit card providers because their customers have increasingly been using credit cards to fund accounts on online exchanges, which are then used to purchase the digital currencies.

Last week Mastercard, the world’s second biggest payments network, said customers buying crypto currencies with credit cards fueled a 1 percentage point increase in overseas transaction volumes in the fourth quarter.

At that time Bitcoin was staging a spectacular rise in value, reaching a peak of $19,187 on Dec. 16 on the Luxembourg-based Bitstamp exchange.

But the biggest and best-known crypto currency has since fallen dramatically and on Monday was down by 6 percent to $7700 at 1100 GMT on Bitstamp, extending losses from Friday amid worries of a global regulatory clampdown.

A spokeswoman for Chase bank said it is not currently processing credit card purchases of crypto currencies because of the volatility and risk involved, while a Citi spokeswoman confirmed a similar ban, but did not give a reason.

The ban extends only to credit card purchases, with debit card users still able to buy crypto currencies.

“Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies,” the Lloyds spokeswoman said in an email.

Lloyds did not say how it planned to enforce the ban, although the Telegraph newspaper reported on Sunday that its credit card customers will be blocked from buying Bitcoin online through a “blacklist” that will flag sellers.

A spokeswoman from the Royal Bank of Scotland declined to comment on the bank’s policy.

Other leading British lenders, including Barclays and HSBC, did not immediately respond to requests for comment on whether they permit credit card purchases of crypto currencies or had any plans to change their policies.

Concerns about the use of Bitcoin and other such currencies extend beyond the use of credit cards for borrowing.

British Prime Minister Theresa May has said Britain should take a serious look at digital currencies such as Bitcoin because of the way they can be used by criminals.

(Additional reporting by Anjuli Davies; Editing by Peter Cooney and Alexander Smith)

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest news

Network Security Using Cryptography: Everything you need to know

This article will describe what is Network Security Using Cryptography and everything you need to know before...

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came under new ownership in December 2019. Since taking over the exchange,...

Fungibility: Bitcoin Mixers Favorite Term That No One Understands

Fungibility, perhaps the most important concept when dealing with a decentralized and anonymous currency, but does bitcoin...

Crypto can’t thrive in the real world – but stablecoins can

We can safely say that the hype about cryptocurrencies is pretty much over. The claims of Bitcoin...
- Advertisement -Banks ban cryptocurrency buying with credit cards

How to double your crypto

Most of us have a small gambler deep inside our souls. We love to feel the thrill...

Cryptocurrency Top Security Risk Concerns: What You Can Do to Protect Your Crypto

A report by CipherTrace revealed that in the first half of 2019, criminals and fraudsters stole more...

Must read

Mercuriex Cryptocurrency Exchange Launches New Utility Token, SURF

MercuriEx Cryptocurrency Exchange, originally developed in 2017, came...
- Advertisement -Banks ban cryptocurrency buying with credit cardsBanks ban cryptocurrency buying with credit cards

You might also likeRELATED
Recommended to you