Lloyds Bank bans customers from buying Bitcoin on its credit cards

Created February 5th, 2018 by Alex Watts

Lloyds Banking Group has banned its customers from buying Bitcoin and other cryptocurrencies on their credit cards, amid fears they could be left in debt if the value of the virtual currency continues to fall.

As reported by the BBC, the banking giant has applied the ban to all of its subsidiaries, so Lloyds Bank, Bank of Scotland, Halifax and MBNA customers will all be affected. It will not apply to debit cards, only to the banking group’s eight million credit card customers.

First to ban buying Bitcoin on credit cards

Lloyds is thought to be the first in the UK to ban credit card customers from borrowing to buy the cyptocurrency, which has more than halved in value in recent months.

The sharp fall in Bitcoin has prompted fears about people running up debts and Lloyds is concerned it could end up footing the bill for unpaid debts should the price continue to fall.

Explaining the ban, a Lloyds spokeswoman said: “We continually review our products and procedures and this is part of that.”

The move follows warnings by regulators in the U.S, China, Russia, South Korea and India.

U.S. credit card companies also ban Bitcoin

Over the weekend, several of the biggest issuers of credit cards in the U.S also banned customers from using their cards to buy digital currency, including Bank of America, Citigroup, JP Morgan, Capital One and Discover.

Facebook has also banned adverts for Bitcoin and other cryptocurrencies on its sites after recent criticism from users about scams and hoaxes being promoted in their newsfeed, while police have warned that digital currencies remain popular among criminals and rogue traders as a way to avoid regular checks.

Significant numbers of people in Britain are thought to have bought Bitcoin as it surged in value, with its value reaching $19,000 (£13,500) in November. However, Bitcoin ended last week down 30% at around $8,000 (£5,700) – its worst week since April 2013.

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