Banks in the United States as well as Britain have banned the use of credit cards in purchasing Bitcoin and other cryptocurrencies.
This is out of fear that, a plunge in their value will leave customers unable to repay their debts.
Britain’s biggest lender, Lloyds Banking Group Plc, also said that, it would ban its credit card customers from buying crypto currencies.
This was after Britian and US issued their ban.
According to a spokesperson from Lloyds, the initiative is aimed at protecting customers from running up huge debts from buying virtual currencies on credit.
Another spokeperson for Chase bank said it is not currently processing credit card purchases of crypto currencies because of the volatility and risk involved, while a Citi spokeswoman confirmed a similar ban, but did not give a reason.
However, the bans extends only to credit card purchases, with debit card users still able to buy crypto currencies.
Concerns have also, arisen among credit card providers because their customers have increasingly been using credit cards to fund accounts on online exchanges, which are then used to purchase the digital currencies.
Lloyds did not say how it planned to enforce the ban, although the Telegraph newspaper reported on Sunday that its credit card customers will be blocked from buying Bitcoin online through a “blacklist” that will flag sellers.
A spokeswoman from the Royal Bank of Scotland declined to comment on the bank’s policy.
Other leading British lenders including Barclays, and HSBC did not immediately respond to requests for comment on whether they permit credit card purchases of crypto currencies or had any plans to change their policies.
