Customers were banned from purchasing bitcoin and other cryptocurrencies with the use of credit cards by Lloyds Banking Group and Virgin Money, one of its challengers, as a number of banks across the globe fear of being on the hook for huge losses if ever the sell-off of the cryptocurrency continues.
Lloyds Bank was the first to announce the said ban, which comes into effect today across all of the brands of the British banking giant. It will imply that cryptocurrency exchanges are barred by the bank, stopping customers from taking on debt to purchase the volatile assets.
A spokesperson for Lloyds Bank stated: “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”
The said ban will not cover transactions that involved debit cards. However, it will prevent customers from making use of credit in order to risk on the price of cryptocurrencies amid concerns that the bubble may be bursting.
This afternoon, the first challenger bank to impose a crackdown on the purchases of cryptocurrencies with a similar ban is Virgin Money.
The said bans come as the holders of bitcoin and other digital assets continue to suffer from steep declines. According to the OnchainFX website, bitcoin’s US dollar value alone has dropped by more than 11 percent during the past 24 hours, while steeper losses were also experienced by the other major cryptocurrencies of the world.
At around 6 in the evening, the price of bitcoin had dropped to $8,154, having been valued yesterday morning at over $9,000. However, the one-year returns for the speculators of bitcoin are still more than 600 percent, notwithstanding the huge drop from the pre-Christmas high that was almost $20,000 per coin.
The move of Lloyds Bank followed the bans that were announced by the Bank of America, Citigroup, and JP Morgan Chase over the weekend.