- REUTERS/Andrew Winning/Files
- Lloyds Banking Group becomes the first major lender in the UK to ban the buying of cryptocurrencies using its credit cards.
- The move follows similar bans from US banks, including JPMorgan Chase, Bank of America, and Citigroup.
- The price of bitcoin is hugely volatile and banks are worried about customers taking big losses and being unable to repay their debts.
LONDON – Lloyds Banking Group has become the first British lender to ban its customers from using their credit cards to purchase bitcoin and other cryptocurrencies, according to a report in the Daily Telegraph.
The Telegraph reports that Lloyds will tell its 9 million credit card holders that attempts to buy digital currencies will be blocked. Debit card transactions will not be blocked, according to the report.
The move will impact customers of Lloyds Bank, Halifax, Bank of Scotland, and credit card firm MBNA, all of whom come under the Lloyds umbrella. Lloyds Banking Group accounts for around a quarter of all credit cards in the UK
A spokesman for Lloyds said the decision was made to “protect customers” from making unaffordable losses on Bitcoin, the Telegraph said.
The ban will be implemented using a blacklist of major cryptocurrency sellers, which will see attempted transactions with those sellers blocked.
Lloyds’ ban on credit card cryptocurrency spending is the first such move from a British-based bank, but follows the announcement of similar bans by three major US lenders.
Lloyds’ ban on using its credit cards to buy digital currencies comes amid a period of enormous volatility in the market. Bitcoin’s price has plummeted in the last couple of months, falling from around $20,000 per coin to as low as $7,700 on Friday, with wild swings in both directions remaining a frequent feature.
On Friday, bitcoin lost as much as 15% of its value during morning trading, before managing to end the trading day in positive territory.
Banks are concerned that such wild swings will expose their customers to heavy losses, making them unable to repay their credit card debts.
The price of bitcoin is back below the $8,000 level on Monday, roughly 2.5% lower in early morning European trading, as the chart below illustrates:
- Markets Insider