Lloyds Ban Credit Card Bitcoin Payments

Lloyds bans credit card payments purchasing Bitcoin

Lloyds Banking Group has banned its customers from purchasing the Bitcoin cryptocurrency using any credit card issued by the group. The group includes MBNA, Halifax and Bank of Scotland and is believed to be the first banking group to ban customers planning to use credit card funds to purchase a cryptocurrency.

Volatility Risk

The move comes after Bitcoin prices slid to half their previous values and news of the ban was issued on Sunday, 11 February 2018. It’s believed Lloyds were afraid they could be liable for any debts incurred as a result of Bitcoin’s loss in value, although they stated the ban was enacted to protect customers from unaffordable credit card losses and that cryptocurrency purchases could still be made using Lloyds Banking Group debit cards.

Lloyds is the biggest banking group in the UK, currently serving a customer base of around 30 million people, and additionally owns around 25% of the UK credit card market.

Large numbers of Brits have purchased Bitcoin over recent months, the price of the cryptocurrency peaked at $20,000 in December 2017. By the time Lloyds Banking Group issued their ban, Bitcoin prices had deflated to around $8,000 which is still significantly higher than the price of $900 which was recorded in January 2017. Early Bitcoin investors became overnight millionaires as the cryptocurrency price escalated through 2017.

Regulators To Step In?

Regulators across the globe have been calling for global regulations to scrutinise Bitcoin and other cryptocurrencies in recent months and adverts for cryptocurrencies have recently been pulled from Facebook, amid fears concerning scams, hoaxes and clandestine transactions.

Bitcoin was created in the year 2009 and is an online currency featuring anonymous account holders, which is not controlled by any centralised authority. Bitcoin has frequently been the currency of choice for hackers’ ransom demands and cyber criminals. It has long been viewed with a degree of scepticism by banks and other financial institutions. Indeed, financier Warren Buffet warned the cryptocurrency will “come to a bad end”, when he ruled out making any investment in cryptocurrencies earlier in 2018.

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Sources:

Guardian – Lloyds ban Credit card payment for bitcoin
Telegraph – Lloyds Bitcoin crackdown