Lloyds Bank Latest to Ban Bitcoin Purchases with Credit Cards

Mon, 02/05/2018 - 10:24
article image
Alex Dovbnya
Following JP Morgan in the US, Lloyds Bank in the UK has placed a ban on buying Bitcoin with credit cards
Lloyds Bank Latest to Ban Bitcoin Purchases with Credit Cards
Cover image via U.Today
Read U.TODAY on
Google News

The Lloyds Banking Group, in the UK, which encompasses Lloyds Bank, Bank of Scotland, Halifax and MBNA, have placed a ban  on the purchasing of Bitcoin and other cryptocurrencies with their credit cards.

The ban comes as the digital currency sits in a slump from its mid-December high  which was fueled by a bout of mass individual adoption. It is a move from the banking group to further protect its customers from more price volatility.

Lloyds fears that people are being caught  up in the hype, buying Bitcoin in any manner, including using debit and credit cards, in the hope of profiting. However, in the current climate, there's not much profiting happening leading to further increased debt.

This ban, however, will not be affecting its debit cards, rather the group's eight mln credit card customers.

Setting a trend

Lloyds is following in the footsteps of JP Morgan in the US who last week placed a similar ban on the buying of Bitcoin with credit cards. It is a little more complicated however.

The Wall Street bank, whose CEO Jamie Dimon was at the center of a bout of Bitcoin bashing last year, has confirmed to CNBC that they will be baring buying Bitcoin with credit cards.

A statement read:

"At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved. We will review the issue as the market evolves."

This again seems to reinforce the idea that these banking groups are worried about the volatility of the cryptocurrency. JP Morgan has halted its customers buying during a period where Bitcoin is in a slump after huge highs back in December.

New style of regulation

These moves by the banks seem to indicate a new style of regulation and control of the use of Bitcoin, but perhaps a regulation that is functional and needed. The promise and hype of a booming Bitcoin economy is almost too much to ignore for some, which has caused some poor buying choice.

It represents not only a move to protect customers, but could be good for the digital currency as many markets have collapsed before when individual default on their debt, such as in the housing crisis which was based around subprime mortgages.

article image
About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.