It’s happened in the US and now it’s happening in the UK. Lloyds
Banking Group, which runs Halifax, Bank of Scotland, MBNA and, of
course, Lloyds, has banned its customers from buying bitcoin with
their credit cards. “We do not accept credit card transactions
involving the purchase of cryptocurrencies,” a Lloyds Banking Group
spokesperson told the Guardian. It’s thought
to be the first UK bank — or rather, banking chain — to block its
members from investing in the cryptocurrency. The worry,
presumably, is that people will borrow cash and then be saddled
with large amounts of debt they cannot pay back due to Bitcoin’s
fluctuating value.
Bitcoin had a stellar trajectory in 2017, rising from roughly
$800 in January to $19,783 in late December. As the value grew, so
did the attention of traditional investors and tech-savvy citizens
who wanted to make a quick buck. The following month, however,
Bitcoin’s value cratered. The reasons are unclear, but it was a
harsh reminder of the volatility of cryptocurrencies. Bitcoin now
sits at just under $8,000 and understandably, banks are worried
about its customers getting caught up in the craze. We’ve asked
HSBC, Barclays, Santander and First Direct for their current
position on credit card-funded Bitcoin transactions.
Financial institutions in the US made a similar move last week.
Credit cards issued by Bank of America, JP Morgan Chase and
Citigroup are now restricted from Bitcoin purchases due to the
associated risks. At the same time, politicians around the world
are scrambling to figure out what, if any regulation is required to
protect their citizens. UK Prime Minister Theresa May said at the
World Economic Forum in Davos: “In areas like cryptocurrencies,
like Bitcoin, we should be looking at these very seriously,
precisely because of the way they can be used, particularly by
criminals.” South Korea, meanwhile, has tried to control the market
by introducing rules that limit cryptocurrency trading to real-name bank accounts.
It’s happened in the US and now it’s happening in the UK. Lloyds
Banking Group, which runs Halifax, Bank of Scotland, MBNA and, of
course, Lloyds, has banned its customers from buying bitcoin with
their credit cards. “We do not accept credit card transactions
involving the purchase of cryptocurrencies,” a Lloyds Banking Group
spokesperson told the Guardian. It’s thought
to be the first UK bank — or rather, banking chain — to block its
members from investing in the cryptocurrency. The worry,
presumably, is that people will borrow cash and then be saddled
with large amounts of debt they cannot pay back due to Bitcoin’s
fluctuating value.
Bitcoin had a stellar trajectory in 2017, rising from roughly
$800 in January to $19,783 in late December. As the value grew, so
did the attention of traditional investors and tech-savvy citizens
who wanted to make a quick buck. The following month, however,
Bitcoin’s value cratered. The reasons are unclear, but it was a
harsh reminder of the volatility of cryptocurrencies. Bitcoin now
sits at just under $8,000 and understandably, banks are worried
about its customers getting caught up in the craze. We’ve asked
HSBC, Barclays, Santander and First Direct for their current
position on credit card-funded Bitcoin transactions.
Financial institutions in the US made a similar move last week.
Credit cards issued by Bank of America, JP Morgan Chase and
Citigroup are now restricted from Bitcoin purchases due to the
associated risks. At the same time, politicians around the world
are scrambling to figure out what, if any regulation is required to
protect their citizens. UK Prime Minister Theresa May said at the
World Economic Forum in Davos: “In areas like cryptocurrencies,
like Bitcoin, we should be looking at these very seriously,
precisely because of the way they can be used, particularly by
criminals.” South Korea, meanwhile, has tried to control the market
by introducing rules that limit cryptocurrency trading to real-name bank accounts.
Read more https://nairalaw.com/uk-banks-ban-bitcoin-purchases-with-credit-cards/