ReutersAs bitcoin and other cryptocurrencies rise in popularity and their prices swing wildly, so too are they entering the consciousness of mainstream financial institutions.
Not only are big banks looking at the applications of bitcoin and the blockchain technology attached to it, so too are they worrying about the impact the volatility could have on their customers.
This is particularly true when it comes to people using credit cards to speculate on bitcoin.
Although there is only anecdotal evidence of this, there is believed to be a growing number of people maxing out their credit cards to buy cryptocurrencies in the hope that their price will appreciate.
Banks are concerned that wild swings in cryptocurrency prices will expose their customers to heavy losses, making them unable to repay their credit card debts.
As such, some lenders have barred their customers from using credit cards to buy cryptocurrencies, with American banks JPMorgan Chase, Bank of America, and Citigroup leading the way. A number of UK banks have now followed suit, but which ones?
Business Insider asked all the UK’s major high street banks for their positions on allowing customers to buy cryptocurrencies on credit. Check them out below.
Lloyds Bank: BANNED
“Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”
A spokesman for Lloyds said the decision was made to “protect customers” from making unaffordable losses on Bitcoin.
“We constantly review our protections for customers as a responsible bank and lender, and are keeping this matter under close review.
“At present UK customers can use both their Barclays debit card and Barclaycard credit card to purchase cryptocurrency legitimately. We take precautions to assess affordability before extending credit, flag and prevent any suspicious transactions and also closely monitor credit risk.”
Royal Bank of Scotland: ALLOWED
“We constantly review transactions but do currently accept credit card transactions for cryptocurrencies,” a spokesperson for the RBS group told Business Insider.
“We don’t block payments for customers wishing to purchase cryptocurrencies when they use a TSB credit card or debit card, however we continue to monitor the use of cryptocurrencies and we will review our position on an ongoing basis,” a TSB spokesperson told Business Insider.
Virgin Money: BANNED
“I can confirm that customers will no longer be able to use their Virgin Money credit card to purchase crypto-currencies,” a spokesperson told Business Insider.
As it is wholly owned by RBS, Natwest’s position is the same as its parent, and it currently allows customers to buy bitcoin on its credit cards.
“We will continue to monitor crypto-currencies as we do with any other factors that could impact our customers,” a Santander spokesperson said.
“At Santander we apply rigorous lending criteria and monitor customer spending. If we feel someone is at risk of getting in to financial difficulty we have support measures in place to help them.”
“HSBC currently allows its customers to purchase digital currencies using their debit and credit cards. Our credit policies remain under constant review and we monitor individual credit card transactions in line with our usual procedures.”
Capital One: BANNED
“Capital One has started declining credit card transactions to purchase cryptocurrency due to the limited mainstream acceptance and the elevated risks of fraud, loss, and volatility inherent in the cryptocurrency market,” a spokesperson for Capital One said.
“Capital One continues to closely monitor developments in cryptocurrency markets and exchanges and will regularly evaluate the decision as cryptocurrency markets evolve.”