International Finance

British banks debate on cryptocurrency investments

Lloyds Bank, Virgin Money, cryptocurrency, credit cards
Lloyds Bank and Virgin Money ban cryptocurrency purchases using credit cards

After Lloyds Banking Group and Virgin Money announced a ban on cryptocurrency, UK’s top banks are seemingly influenced by the decision.

The value of Bitcoin in the past month has dropped severely to below US$8000, and several lenders have also imposed a ban. The move has encouraged Lloyds to restrict its credit card customers from investing at cryptocurrency exchanges, observed the Financial Times.

Lloyds customers still have the facility to purchase cryptocurrencies using debit cards. Virgin Money said: “Following a review of our policy we can confirm that customers will no longer be able to use their Virgin Money credit card to purchase cryptocurrencies. This only applies to our credit cards and not our debit card.”

Essentially, banks can request credit card networks such as Visa and MasterCard to restrict credit card customer payments to a specific merchant limit.

According to a spokesperson for the banking group, “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.” The decision came in time to protect customers from heavy investments in Bitcoin and a consequential long-term debt.

One of UK’s leading financial institutions, Barclays held a meeting to focus on the ‘matter under close review,’ before a final decision is passed. “At present UK customers can use both their Barclays debit card and Barclay card credit card to purchase cryptocurrency legitimately,” however, “we take precautions to assess affordability before extending credit, flag and prevent any suspicious transactions and also closely monitor credit risk,” the bank said.

Even social media platforms such as Facebook have imposed a ban on cryptocurrency ads.

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