The banking system has taken a step to prevent them from becoming an unwilling stream of finance for cryptocurrency investors, as major credit cards issuers started blocking Bitcoin purchases last week.
The first major credit institution to put a ban on Bitcoin transactions in its credit cards was Bank of America. Citigroup also issued a ban on the transactions, while Capital One and Discover had already enacted their own bans early this years after Bitcoin suffered a dive in its value of approximately 57% and is currently trading at just $8,000 from $20,000 last December.
Also, Britain’s biggest bank, Lloyds, put in place a ban citing fears that its customers could run up huge losses with Bitcoin volatility. Lloyds will follow this ban with the block of cryptocurrencies for its credit card customers Halifax, Bank of Scotland ,and MBNA, effectively blocking these transactions for the largest part of Great Britain.
For other finance institutions, there’s another issue involved, as J.P. Morgan Chase told CNBC. There is “volatility and risk involved” in the purchase of cryptocurrencies because the regulations to prevent money laundry with them, a hard standard for the credit institutions to comply with considering the involvement of third-party companies involved.
Despite these blockages, the adoption of Blockchain technology will continue. Last week, for example, Jack Dorsey’s Square announced that most users of its app can now trade Bitcoin. More regulatory efforts and more policy reviewing from lenders are expected as the Blockchain-driven cryptocurrencies continue to evolve into a more stable and consolidated product.
