Tuesday 25 September 2018

Lloyds bans credit card customers from buying bitcoin over debt concerns

The move follows warnings by regulators in the US, South Korea, China, Russia and India over the cryptocurrency. Stock image
The move follows warnings by regulators in the US, South Korea, China, Russia and India over the cryptocurrency. Stock image

Ryan Wilkinson

Lloyds Banking Group has banned credit card customers from buying Bitcoin amid fears they could be left in debt as the cryptocurrency's value deflates.

The banking giant, which includes Halifax, MBNA and Bank of Scotland, is thought to be the first in the UK to ban credit card customers from borrowing to buy the digital currency, which has more than halved in value in recent months.

Bitcoin's slide has led to concerns that people who borrow money to purchase it will be left with large debts if the virtual currency continues to depreciate.

Significant numbers of people in Britain are thought to have bought Bitcoin as it surged in value, peaking at nearly $20,000 in December.

As news of Lloyds's ban emerged on Sunday the value was around $8,000.

A spokeswoman for the banking group said: "Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies."

The move follows warnings by regulators in the US, South Korea, China, Russia and India over the cryptocurrency.

Germany's Bundesbank has also called for global regulation of Bitcoin and France's finance minister wants tougher rules for cryptocurrencies.

Meanwhile, Facebook banned adverts for Bitcoin and other cryptocurrencies on its sites after recent criticism from users about scams and hoaxes being promoted in their newsfeed.

Critics say cryptocurrencies are used by criminals and rogue states to carry out clandestine transactions.

Earlier this month, US billionaire Warren Buffett ruled out a foray into cryptocurrencies, warning that the Bitcoin boom will "come to a bad ending".

The chairman and chief executive of Berkshire Hathaway has joined the chorus of voices criticising the digital currency.

His comments came just a day after JP Morgan chief executive Jamie Dimon said he regretted calling Bitcoin a "fraud".

Press Association

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