Australia’s leading bank, the Commonwealth Bank (CommBank), announced it is banning its clients from buying cryptocurrencies with credit cards issued by it, effective February 14. The restriction also applies to holders of Bankwest credit cards. Payments from cryptocurrency exchanges to credit cards, however, will be processed.
Clients of the two institutions can also continue to use their debit cards or transaction accounts to buy cryptocurrencies.
CommBank explains its decision with the fact that the cryptocurrencies are unregulated and highly volatile. “We have made this decision because we believe virtual currencies do not meet a minimum standard of regulation, reliability, and reputation when compared to currencies that we offer to our customers. Given the dynamic, volatile nature of virtual currency markets, this position is regularly reviewed,” the bank said.
CommBank is the first Australian bank to ban its credit card holders from buying cryptocurrencies, but is not the first in the world. Last week three major US banks – J.P. Morgan Chase, Bank of America and Citi have announced similar measures. So did UK’s Lloyds Banking Group and Virgin Money.
The reasons for the decisions were similar – high price volatility of the cryptocurrencies and the risk of clients falling into serious debt.