Lloyds Bank bans bitcoin and other cryptocurrency credit card purchases
Lloyds Banking Group and challenger Virgin Money have banned customers from buying bitcoin and other cryptocurrencies using credit cards, as a wave of banks around the world fear being on the hook for big losses if the cryptocurrency sell-off continues.
Lloyds was first to announce the ban, which comes into effect today across all of the British banking giant's brands. It will mean cryptocurrency exchanges are blacklisted by the bank, preventing customers from taking on debt to buy the volatile assets.
A Lloyds spokesperson said: “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”
Read more: Bitcoin's back below $9,000
The ban will not cover debit card transactions, but will prevent customers from using credit to speculate on the price of cryptocurrencies amid fears the bubble may be bursting.
Virgin Money became the first challenger bank to crack down on cryptocurrency purchases with a similar ban this afternoon.
The bans come as holders of bitcoin and other digital assets continue to suffer steep declines. The US dollar value of bitcoin alone has fallen by more than 11 per cent in the last 24 hours, according to the OnchainFX website, while other major cryptocurrencies have also suffered steeper losses.
At the time of writing the price of bitcoin had fallen to $8,154, having been valued at more than $9,000 only yesterday morning. However, one-year returns for bitcoin speculators are still above 600 per cent, despite the massive decline from the pre-Christmas high nearing $20,000 per coin.
Lloyds's move follows bans at the weekend from JP Morgan Chase, Bank of America, and Citigroup.