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05-Feb-2018
Bitcoin price drops as major banks ban cryptocurrency credit card purchases
SiliconANGLE
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The price of bitcoin dropped again in trading over the weekend as banks in both the United
States and the United Kingdom imposed bans on customers using their credit cards to
purchase cryptocurrencies.
The bans started Friday with JP Morgan Chase Co., Bank of America Corp. and Citigroup
Inc. all announcing that they were moving to ban customers using their credit cards on
cryptocurrency purchases with the bans themselves being implemented over the weekend.
The trend them spread across the Atlantic with an announcement from Lloyds Bank plc
Sunday that it would as also ban customers from using their credit cards to purchase
cryptocurrencies starting Monday.
In all cases, the bans only apply to credit cards with customers still able to use their debit
cards, that is their own funds versus credit extended to them by their financial institutions, to
make bitcoin and cryptocurrency purchases.
All banks involved cited volatility in cryptocurrency markets, with a spokesperson for
JPMorgan telling CNBC that “at this time, we are not processing cryptocurrency purchases
using credit cards, due to the volatility and risk involved,” before adding that they “will review
the issue as the market evolves.”
The “volatility” cited by the banks is code for customers using credit cards to purchase
cryptocurrency presenting a higher risk factor for default as customers who lose money on
cryptocurrency trading may be more likely to be unable to repay their debts. The BBC
reports that Lloyds fears people are buying bitcoin to make a profit if its value rises but face
debts if it falls and “is concerned it could end up footing the bill for unpaid debts should the
price continue to fall.”
The bank credit card bans further spooked markets, having come on top of a string of bad
news in the cryptocurrency space during the week, including a cryptocurrency ban in India ,
a U.S. Securities and Exchange Commission investigation into leading bitcoin exchange
Bitfinex and related company Tether, and a ban on all cryptocurrency advertising on
Facebook .
As of 9:45 p.m. EST, bitcoin was trading $7,968.33, down from $8,646.41 only three days
ago and its lowest price since Nov. 18.
Photo: Pixabay Since you’re here …
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