The Lloyds Banking Group has banned the use of its credit card for the purchase of Bitcoin with immediate effect. This news comes amid fears that it could be left with a huge debt as crypto values continus to deflate. The banking juggernaut, which includes MBNA, Halifax, and Bank of Scotland, is the first bank in the UK to ban the use of its credit for crypto purchases. This is after the value of the cryptocoin market more than halved in recent weeks.
The recent slid in the value of Bitcoin has caused concerns in the banking world that those who bought Bitcoin on credit will leave banks with huge debts if the slide continues. In the UK, it is thought that many people have purchased Bitcoin, especially when its value began to surge. At one point, the value of one Bitcoin peaked at £14,465 or $20,000. However, when Lloyds Bank announced the move, the value of one Bitcoin had hit $8,000. According to a spokesperson for the bank,
Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.
Regulators Have Been Issuing Warnings
This move follows warnings from regulators globally in places such as Russia, China, India, the US, and South Korea. The French finance minister has called for tougher regulation for crypto, and the Bundesbank of Germany wants Bitcoin to be regulated globally.
Recently, Facebook also banned any adverts for Bitcoin and other cryptocoins. This came after a wave of criticism from its users about hoaxes and scams promoted on the site. Most people who are critical of cryptocurrencies say that rogue states and criminals use them for clandestine transactions. The police have also warned that Bitcoin and other digital currencies were becoming a popular option for criminals, who wanted to evade the law.
Major Investors Do not See a Future in Bitcoin
This month, Warren Buffet, the US billionaire investor, ruled out investing any of his money in cryptocoins. He warned that the Bitcoin boom “will come to a bad ending”. The CEO and chairman of Berkshire Hathaway recently added his voice to those critics of digital coins. His comments came just a short while after the CEO of JP Morgan, Jamie Dimon, said that he regretted calling Bitcoin a fraud. However, he said that he was still not interested in digital currency. Despite this major slide, the current value is still significantly higher than its $900 value in January 2017. Even the Prime Minister of England, Theresa May, has warned that action may be needed against digital currencies.
What do you think about the latest move by Lloyds bank to ban cryptocoin purchases using its credit cards? Leave us your thoughts in the comments section.