Major UK Bank Imposes Ban on Using Credit Cards for Cryptocurrency Purchases
As it is now, one of the biggest UK-based banking establishments, Lloyds Banking Group, is stopping its clientele from using credit cards to buy Bitcoins and other cryptocurrencies.
The BBC reports that the ban applies to the Lloyds Banking Group’s eight million credit card holders and it came into effect on February 5th across its subsidiaries, including Lloyds Bank, Halifax, MBNA and Bank of Scotland.
“The move follows a sharp fall in the value of digital currencies, prompting fears about people running up debts”, BBC reported.
CoinDesk earlier reported that the Bank of America and JP Morgan Chase will also no longer enable customers to purchase Bitcoin and other cryptocurrencies with their credit cards starting in February. JP Morgan’s ban came into effect on February 3rd, 2018 due to concerns about the credit risks of its customers making Bitcoin purchases through their cards.
The banks are concerned that customers may use their credit cards to buy cryptocurrencies in a frenzy market but eventually may be unable to repay their debit balances in case the market drops.
The report, notwithstanding, says the ban will have no effect on people who use debit cards in buying cryptocurrencies.
“The policy change is a result from its current review of its banking products. It also comes at a time when the Bitcoin market has seen a significant decline recently, which leads to the banking group’s concern of amounting unpaid debt,” a Lloyds’ spokeswoman told the BBC.
CoinDesk reports that after reaching its all-time-high of nearly $20000 in mid-December 2017, Bitcoin is now seeing a two-month low averaging below $8000 most of this week, based on data from CoinDesk’s Bitcoin Price Index.
