USA credit card companies block cryptocurrency purchases

Its customers can still buy digital currencies with their debit cards, and: if you know how to buy cryptocurrencies, you know how to move money around onto your debit card. These untraceable currencies could also be hard for the banks to monitor, a requirement to be careful about money laundering.

The bear market in bitcoin isn’t letting up, as the original cryptoasset has fallen to its lowest level in more than two months.

Bitcoin has lost more than half its value since December 18 previous year, falling below US$8,000 on Friday for the first time since November.

Significant numbers of people in Britain are thought to have bought Bitcoin as it surged in value, peaking at almost US$20,000 (£14,465) in December.

An earlier report by Bloomberg suggested that major USA lenders Bank of America, Citigroup and JPMorgan Chase were making similar moves, due to the credit risk associated with cryptocurrency transactions.

The banking group controls Lloyd’s Bank, Halifax, MBNA and Bank of Scotland, and the ban has been triggered by the deflation of Bitcoin.

Citigroup said on Friday that it too will halt purchases of cryptocurrencies on its credit cards. We’ve asked HSBC, Barclays, Santander and smaller banks such as First Direct for their current position on credit card-funded Bitcoin transactions.

Leading UK bank Lloyds joined its counterparts in the USA by banning the purchase of Bitcoin and other cryptocurrencies for its customers using credit cards.

And its importance in the world of digital currency has meant that decisions made in Seoul can result in large, sudden price swings.

Citigroup Inc, the nation’s third-biggest bank, is still reviewing its policy.

Leading credit card networks and providers earlier changed the terms of digital currency purchases which they now treat as a cash advance with additional charges and higher interest rates, Bloomberg wrote.

The latest cryptocurrency selloff is believed to have been largely driven by news that the People’s Bank of China (PBoC) is banning all foreign cryptocurrency exchanges in China.

Lloyds has banned its nine million credit card customers from buying Bitcoin after the cryptocurrency more than halved its value in just two months

 

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