Following Pace of Wall Street, British Rice Bank Bans Virtual Currency Buying with Credit Cards

Credit card is a popular electronic payment method. When buying virtual currency such as Bitcoin (Bitcoin), people often use credit card to pay. However, some banks have begun to examine the risks, and some have even banned the use of credit cards to purchase Bitcoin.

British Rice Bank Group announced that all its banks have stopped using credit cards to purchase virtual currency, over worries about the continued decline in value will put customers at huge asset losses.

The price of Bitcoin has dropped from a peak of over US$19,000 to approximately US$8,000 recently. Some banks worry that customers will suffer huge asset losses and prohibit the use of credit cards for purchases.

According to the US CNBC report, Rice Bank Group announced this measure on Monday. Its subsidiary Rice Bank, Bank of Scotland, Halifax and credit card company MBNA will not accept credit card purchases of virtual currency from today (February 5, local time).

This is the first financial group in the UK to take this movement.

The price fluctuations of virtual currencies such as Bitcoin have attracted the attention of regulatory agencies and government officials in various countries. British Prime Minister Theresa May pointed out to Bloomberg earlier that the government is paying close attention to the virtual currency market.

Also in the United States, in recent weeks, large banks have banned the use of credit cards to purchase virtual currencies. JPMorgan Chase, Bank of America and Citigroup have all announced the same decision.

The Wall Street Journal pointed out that Capital One Financial Corp. prohibited customers from using credit cards to purchase all virtual currencies in January. The bank said that these virtual currencies have not become mainstream, and they are also involved in fraud, have high volatility, and are prone to the risk of asset loss. The bank said it will reassess regularly as the virtual currency develops.

As early as 2015, Discover Financial Services had banned the use of the institution’s credit card to purchase virtual currency;

The US subsidiary of Toronto-Dominion Bank stated that it will no longer process some Bitcoin transactions for security reasons;

Bank of America and Citigroup currently allow the use of credit cards to purchase Bitcoin, and both banks said they would carefully review current policies.

Banks are generally not allowed to refuse transactions unless there are legal risks.

This situation reflects that the banking industry and even credit card companies believe that virtual currencies are risky. Because under normal circumstances, card issuers such as Visa and Mastercard do not allow banks to reject transactions from a particular merchant unless the merchant violates the law, or the issuer is worried that the transaction involves fraud or other legal risks.

American Express, another major credit card company, allows cardholders to buy Bitcoin, but they must link the credit card with a specific virtual wallet, and purchase no more than US$200 per day and no more than US$1,000 per month.