Per Reuters, Lloyds Banking Group, Britain’s biggest lender, announced on Sunday that it will ban credit card customers from buying crypto coins. In the US, JPMorgan Chase, Bank of America, and Citigroup have announced bans, while Lloyds Banking Group is expected to do the same in the United Kingdom on Monday.
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The Lloyds ban, which comes into effect today across all of the British banking giant’s brands, will mean cryptocurrency exchanges are blacklisted by the bank, preventing customers from taking on debt to buy the volatile assets.
Over the past week, many banks have already issued a ban on using credit cards to buy cryptocurrencies. Good guy banks? Pfft.
JPMorgan, Bank of America, and Citi are banning bitcoin purchases using their cards. Nelms, you alright there, mate?
Over the past year, Bitcoin has seen its price surge by more than 700%.
The price of Bitcoin climbed from $952 (£675) to a December peak of $19,435 past year on a wave of public interest in cryptocurrencies. The ban will not apply to debit cards.
Banking experts predict other leading financial institutions will quickly follow suit, reports the Telegraph.
On Monday, bitcoin pulled back in early trading in London to below $8,000 or approximately 2.5% lower than Friday’s close. Besides, City Group also confirmed that it’s halting the cryptocurrency purchase on credit.
At this time, we are not processing cryptocurrency purchases using credit cards due to the volatility and risk involved.
Combine the skepticism of banks and regulators with an influx of new investors excited about all things cryptocurrency, and you have a recipe for a sell-off.
A problem with this move is that cutting off credit card purchases might constrict the market, by making it more hard for enthusiasts to buy in.
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A spokesperson for Virgin Money tells Moneywise: “Following a review of our policy we can confirm that customers will no longer be able to use their Virgin Money credit card to purchase crypto-currencies”.
