Major Banks in US and UK Won't Allow Purchase of Cryptocurrencies With Credit Cards Anymore
Major banks in the United States and the United Kingdom have recently imposed a new policy that will no longer allow customers to use their issued credit cards when purchasing cryptocurrencies.
According to Bloomberg, major banking corporations such as JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. have all recently started banning the purchase of any type of crypto money with the credit cards they issue due to the "credit risk" it entails.
Both Bank of America and Citigroup applied the new policy last Friday while JPMorgan followed on Saturday.
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The same publication reported that a company memo from Bank of America confirmed that the ban on purchasing crypto money covers all of the personal and business credit cards that the corporation issues. However, customers who have debit cards can still use them to purchase the likes of Bitcoin.
As for Citigroup, spokeswoman Jennifer Bombardier confirmed the ban on crypto purchases but also said: "We will continue to review our policy as this market evolves."
Meanwhile, the United Kingdom-based Lloyds Bank has also applied the same policy on its credit card customers. In a statement, representative of the corporation said: "Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies."
Reports cited several reasons for why major banking groups want nothing to do with crypto trading, especially when their credit cards are involved. However, one of the most common factors mentioned is the risk that the constantly fluctuating value of cryptocurrencies experience.
The banking groups are likely afraid that their customers might bet big on these cryptos using their credit cards but end up losing, which may result to an inability to pay their credit card bills.
Over the years, Bitcoin has grown with a market capitalization of over $120 billion. However, it still sees major dips every now and then. Just last month, almost all digital currencies experienced major dips in their prices. For example, Bitcoin (the crypto money with the biggest market capitalization) saw as much as a 25 percent dip.
However, Bitcoin has since regained a slightly better position. As of this post, it has seen a 5.27 percent increase in the last 24 hours.
