Why Many Banks Banned Bitcoin Purchases On Credit Cards?

Many banks these past two weeks started not to allow their customers to use their credit cards so they can buy cryptocurrencies. The entire Bitcoin purchases frenzy started out in the US with the Bank of America, JP Morgan, and Capital One and then it moved to the UK when Lloyds Bank joined.

This is just an event that it was expected due to last year problems with VISA which triggered this behavior. Last year VISA ended cooperation with a cryptocurrency card provider and many users lost a lot of their money as a result of that. The provider didn’t work as requested by VISA so the company found it easier to end it. These events brought a lot of bad press and traders and investors felt like cryptocurrencies are very difficult to transfer to a fiat currency. Exchanges have daily limits and every user could use their credit card and fund their account for approximately 500 pounds a day. Banks are using the excuse that because of the high volatility and money laundering related to cryptocurrencies, they decided to stop using them.

Banks are even not approving mortgages for people who have gained a lot of capital by investing in Bitcoin. Banks are doing this because as they say, the source of the funds can’t really be verified. Many believe that that is just a cover and that the banks just don’t know how to transfer that into their accounts. Banks worry that many people will borrow money from them and then just be stuck in debt because of the extremely fluctuating price of Bitcoin.

Currently, it is not known if this trend is going to continue – especially because of the regulation which is happening in more and more countries.

We hope that this article answered your questions on banks banning Bitcoin purchases on credit cards. For more news, make sure to check our site!