Earthmeta Earthmeta

Top Banks Ban Buying Bitcoin with Credit Cards over Debt Fears

| Updated
by Bhushan Akolkar · 3 min read
Top Banks Ban Buying Bitcoin with Credit Cards over Debt Fears
Photo: frankieleon / Flickr

Owing to the risks of over buying and purchasing, banks across the U.S and Europe and banning crypto purchases through credit cards.

It has been a tough beginning to 2018 so far for the crypto enthusiasts as the markets have shown sideways movement in the past few weeks. After a series of regulatory proposals put forward by the South Korean government, a lot many investors are seen pulling their money out of the crypto market in the fear of losing out enough trading volumes coming from the Asian country.

In this testing times, just when investors and crypto enthusiasts are waiting for something positive to come their way, there is one more bad news coming their way in the market. Several banking institutions are now collectively deciding in order to choke payments through credit cards for crypto purchases. This could possibly mean that the liquidity in the market can take a further hit.

Last weekend, Bloomberg reported that “A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife.” Three major Wall Street giants – JP Morgan, Bank of America and the Citi Group announced that they have terminated the services for crypto purchases on their credit cards. JP Morgan company spokeswoman Mary Jane Rogers, while introducing the ban on Feb 3 Saturday, said that the bank doesn’t intend to risk the credit purchases on cryptocurrency transactions.

Bank of America too started declining credit card transactions for crypto purchases on Friday, Feb 2 and said that the policy is applicable to all class of cards – personal or business cards. However, users can still make purchases through their debit cards clarified company spokeswoman Betty Riess. Citi Group too said that it will halt crypto purchases made with the bank’s credit cards. Company spokeswoman Jennifer Bombardier said: “We will continue to review our policy as this market evolves.”

Note that it is not just banks from the U.S, but banks from Europe too, are getting wary of the situation and the heavily falling crypto markets. Starting today on Monday, Feb 5, the Lloyds Banking Group which includes  Lloyds Bank, Bank of Scotland, Halifax and MBNA customers has issued a similar ban on crypto purchases made through credit cards.

A common fear which all of these banks share is that with the recent craze surrounding crypto buying, banks that investors might end up much higher than what they can usually afford to. Gillian Guy, the chief executive of Citizens Advice, backed the announcement by Lloyds, saying it “shows they recognize the risks of credit card customers running up debt they can’t afford.”

Moreover, there is a growing fear that thieves stealing crypto cards might be using it to their undue advantage of converting fiat currencies into decentralized digital assets. As a result, they can possibly use it for illicit activities of money laundering or even terror funding. Government agencies have asked banks to remain cautious regarding this matter.

Looking at the overall market scenario, it looks like it is right now not at all in the mood of recovery. Bitcoin and other altcoins have further slipped down as the overall market valuations are now just #363 billion. According to CoinMarketCap, Bitcoin is trading below $8000, to be precise at $7703 at the press time with a market cap of $129 billion.

Altcoin News, Bitcoin News, Cryptocurrency News, News
Related Articles