Following the weekend news of three major US banks declining purchases of cryptocurrencies with credit cards, a major UK banking group – Lloyds Banking Group has followed suit.
According to a BBC report, holders of credit cards issued by Lloyds Bank, Bank of Scotland, Halifax and MBNA will no longer be able to buy cryptocurrencies with those cards, starting from January 5, Monday. The ban only applies to credit cards (around 8 million) and not debit cards.
Similarly to J.P. Morgan Chase, Bank of America and City, Lloyds Bank explained its move with the high volatility of cryptocurrency prices and fears of people running into high debt. The new policy can be reviewed in the future.
“We continually review our products and procedures and this is part of that”, a Lloyds Bank spokesperson BBC. According to the report, the main concern of the financial institution is that it may end up footing the bill for unpaid client debts.
Lloyds Banking Group is the first major issuer of credit cards in the UK to ban purchases of cryptocurrencies with credit cards for their holders, but most likely will not be the last.
Meanwhile, the UK prime minister Theresa May said that action against cryptocurrencies may be taken, because they can be used by criminals for money laundering and funding of criminal activities. The UK The Treasury also said that it plans to update regulation and to bring virtual currency platforms into anti-money laundering and counter-terrorist financing regulation. Currently there are no specific regulations and requirements for the cryptocurrency exchanges operating in the UK.