Virgin Money UK, a Richard Branson-owned financial services provider, said it is banning its customers from buying Bitcoin and other cryptocurrencies with credit cards, reports BBC.
“Following a review of our policies, I can confirm customers will no longer be able to use their Virgin Money credit card to purchase cryptocurrencies”, said a company spokesperson. Virgin Money has issued about 4 million credit cards.
Similarly to another major UK financial services provider – Lloyds Banking Group, which made the same decision on Monday – Virgin Money is only stopping crypto purchases with credit cards, but not with debit cards. The company concern, similar to that of Lloyds, is that its clients can fall into heavy debt, due to the high volatility and price plunge of Bitcoin in the past few days.
For example, only this Monday Bitcoin lost nearly 11% of its value, to $7,297.65. At the time of writing this article, the Bitcoin price was even lower and stood at $6,803.19. But, in fact, the nosedive does not affect only Bitcoin, but all major cryptocurrencies.
The continuing depreciation is attributed to tightening regulatory scrutiny, the decision of Facebook to ban all cryptocurrency-related ads (among other high-risk financial products), the plans of the Chinese government to cut the access to overseas crypto exchanges and restrictions imposed by the South Korean government and the intentions of the Indian authorities to outlaw the cryptocurrencies. Another factor is the decision of three major US banks: Citi, Bank of America and J.P. Morgan to also ban their credit card holders from buying cryptocurrencies with them.
According to BBC, another major UK bank – Barclays is still allowing its clients to use their credit cards to buy Bitcoin, but it may not be for long. “We take precautions to assess affordability before extending credit, flag and prevent any suspicious transactions and also closely monitor credit risk,” a Barclays spokesperson told BBC. The banking trade organization UK Finance said it had not released any guidance on the matter.