A growing number of banks have begun opposing the purchase and sale of Bitcoin and other cryptocurrencies. This is especially true when it comes to payment cards, although it also affects bank transfer-related transactions. Lloyds Banking Group is the latest financial institution to take a rather severe approach in this regard. It now forbids all of its customers from purchasing Bitcoin with its credit cards. It is another worrisome development, albeit one that will hardly surprise anyone at this point.
Lloyds Banking Group Rejects Bitcoin Purchases
No one can deny cryptocurrencies have become a rather popular commodity on a global scale. Especially due to the 2017 crazy bull run, a lot of people are now looking at ways to purchase Bitcoin and similar currencies. That process can usually be completed using various payment methods, including wire transfers and payment cards. Although the number of platforms accepting credit and debit card payments is still small, there is genuine interest from consumers in exploring this option.
From a consumer point of view, purchasing Bitcoin or other cryptocurrencies with a credit card makes a lot of sense. It’s a convenient process which can be completed in a matter of minutes. Even though payment processors carry significant risk in this regard, the credit card payment option is slowly becoming more popular. It seems this has irked quite a few banks and other financial institutions around the world, though.
The latest financial institution to take offense is Lloyds Banking Group. More specifically, they no longer allow any of their customers to purchase Bitcoin with a Lloyds-issued payment card. That in itself is not entirely surprising at this stage, as a lot of banks are seemingly threatened by Bitcoin and other cryptocurrencies right now.
According to company officials, the new ban went into effect yesterday. Moreover, it also applies to customers of Bank of Scotland, Halifax, and MBNA. Since this banking group has quite a few institutions under its control, it is only normal that it will enforce the same rules upon every single one of them. Considering that this decision affects both credit and debit cards issued by all of these institutions, it is to be expected that this decision will have a big effect on the market.
The main reason for this ban is that Lloyds Banking Group is concerned about its customers buying Bitcoin for profit. If the value of Bitcoin tanks like it is doing now, customers will incur massive debts in the process. If the debts are not paid back in full, the banking group may be forced to foot the bill, which is not an ideal situation for any party involved. As a result, this decision makes a lot of sense from the group’s perspective, even though its customers may not be too happy about it, for obvious reasons.
With the Bitcoin price suffering from massive volatility in the past few weeks, decisions like these will become more prevalent. After all, financial institutions want to oppose Bitcoin in any way possible. By declaring they act in the best financial interest of their customers, such decisions are made with relative ease. Whether this decision will ever be reversed has yet to be determined, but it is certainly a possibility.