JP Morgan Chase, Bank of America and Citigroup – three of the largest banking institutions in the US and issuers of millions of credit cards – have announced they are stopping the processing of purchases of cryptocurrencies with credit cards, reports CNBC.
The termination is effective from February 3.
Representatives of the three banks told the media that the reason for the decision is the high risk and volatility of the cryptocurrency prices.
Both J.P. Morgan Chase and Citigroup said the new policy is subject to further review as the cryptocurrency market evolves.
“At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved,” a J.P. Morgan Chase spokesperson said in a statement to CNBC.
According to the Citigroup statement, the institution has “made the decision to no longer permit credit card purchases of cryptocurrency” and “will continue to review our policy as this market evolves.”
Earlier this year another major issuer of credit cards in the US – Capital One Financial has also banned buying of cryptocurrencies with credit cards, while Discover Cards has in practice banned this since 2015 – long before the cryptocurrency mania has gripped the world.
There are several major cryptocurrency exchanges that offer the option to buy cryptocurrencies with a credit card. The most notable example is Coinbase – a major US exchange that offers its services in over 30 countries across the world.
The news comes against the background of the continuous decline of the prices of Bitcoin and other major cryptocurrencies. Bitcoin, for example, has fallen from around $17 000 to around $7000 in just one month and lost nearly $50 billion of its market value.