Banks In The UK and US ban Customers From Using Credit to Buy Cryptocurrencies
Banks in the United Kingdom and the United States have banned customers from using credit cards to buy Bitcoins and other cryptocurrencies. Following a poor showing this month, in which Bitcoin lost thousands of dollars worth of value, banks fear that cryptocurrencies could cause consumers to take on debt they can’t afford.
Lloyds Banking Group Plc which issues more than a quarter of all credit cards in the U.K. along with Virgin Money both said they were banning their customers from using credit cards to purchase digital currencies. This announcement follows a similar one from U.S. banks such as JP Morgan Chase & Co and Citigroup.
The banks say that this decision is motivated out of a desire to protect customers from losing money by investing in cryptocurrencies. They say that customers often use their cards to make purchases of Bitcoin or other currencies. However, they fear that the market is too volatile and could lead customers into taking on debt that they cannot pay back ultimately leaving them on the hook.
However, not all banks are following this trend. Barclays, which is Britan’s largest credit card provider and controls more than 27 percent of the market, said that they currently allowed customers to use their cards to purchase cryptocurrencies. However, they did note that their policies were subject to change and they were closely monitoring the matter of cryptocurrencies.
In addition to Barclays, Span’s second largest bank, BBVA, told Reuters that it has no restrictions on the purchase of cryptocurrencies.
While the restrictions regarding cryptocurrencies are not uniform, they still come as a blow to the young industry which saw some mainstream acceptance in 2017. However, a sharp decline in value at the start of this year did a lot to undermine the industry’s growing credibility. For now, we’ll have to see what the future holds.
Eric is an avid tech junkie, gamer, and comic fan. When he's not working on his PC, you'll find him at your local comic book shop.