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20+ Banks that Have Banned Cryptocurrency Trades With Credit Cards

Many banks around the world are embracing blockchain technology. For example, India-based Axis Bank, and Standard Chartered of Singapore are now using the Ripple network to facilitate cheaper and faster over-the-border funds transfers. Deutsche Bank, HSBC, KBC, Natixis, Rabobank, Societe Generale and Unicredit are supporting the IBM-backed Hyperledger Fabric project, which has similar aims.

Meanwhile, Citibank is developing a cryptocoin called Citicoin. Yet, Citigroup is one of several major banking conglomerates that blocks their customers from using their credit cards to buy cryptocurrency.

Read on to learn why some banks are against cryptocurrency and find out which banks around the world are blocking their customers from buying bitcoin and other cryptocoins.

Note: If there’s a bank that has banned cryptocurrency that isn’t listed here, please leave a comment below! We’re constantly trying to stay on top of any changes, but we do miss one from time to time.

Why Are Banks Concerned About Cryptocurrency?

Blockchain breakthroughs can help banks save money and improve the speed of their services. However, the picture isn’t entirely rosy for banks. In fact, several banks view blockchain technology as a threat. Here are just a few reasons why financial institutions believe that cryptocurrency is risky.

  • There’s no way to repossess cryptocurrency. Some banks are worried that some of their customers will rip them off– and it’s not hard to see why, given the irreversible nature of cryptocurrency transactions. After all, if you take out a loan to buy a physical asset like a car or a house, the bank can hire a repo man to reclaim it if you miss too many payments. However, there’s no way for a bank to take ownership of your crypto accounts.
  • Fear, uncertainty and doubt. Another concern that some banks have is that cryptocurrency is a bubble that will one day pop. If a crypto apocalypse ever happens and swarms of customers suddenly default simultaneously as a result, banks could end up with the short end of the stick.
  • Frauds and scams. Protecting customers from fraud is also something that some banks worry about. Crypto scammers take advantage of credit card chargeback features to trick sellers into parting with their cryptocoins. In addition, many new altcoins are nothing more than classic pyramid schemes dressed up in technical language. Banks that are wary of ICOs often point to a recent study published by Satis Group LLC, which found that over 80% of all ICOs (Initial Coin Offerings) are scams.
  • Money laundering concerns. Bitcoin transactions are difficult to trace, which is why it’s commonly known to be a “pseudo anonymous” coin. But other coins like Monero offer even more anonymity and privacy than bitcoin. Privacy coins are controversial because even though they give law-abiding consumers the ability to shop in privacy, they also provide money launderers with an easy way to funnel dirty money to anyone around the world via the internet.
  • Blockchain-based tech is the competition. In an interview with CNBC, Rainer Preiss, an executive director at Taurus Wealth Advisors, said that large banks are most probably “very afraid of blockchain and bitcoin.” The reason: because blockchain technology is far more transparent and open compared to “too big to fail” banks and notoriously secretive financial behemoths like the US Federal Reserve. If another big worldwide bank crash happens, people may lose faith in the traditional banking system and use cryptocurrency instead.

Banks With Anti-cryptocurrency Policies

All of the following banks have either blocked their customers from purchasing crypto with their credit/debit cards or have terminated their relationships with crypto payment services.

United States

Banks that have banned crypto in the US include Wells Fargo, Bank of America, Citigroup, J.P. Morgan Chase, Discover and Capital One. Here’s a closer look at the logic behind each bank’s decision.

Capital One

Capital One first became interested in bitcoin in 2014, when the bank started looking for researchers that were qualified to study “the impact of new technologies like Google Glass, Leap Motion, smart watches, Bitcoin, and iBeacon.” Two years later, the bank made headlines again when it partnered with blockchain startup Gem to develop blockchain-based healthcare solutions.

Even though Capital One seems to be enthusiastic about its own blockchain tech, the bank believes that there’s not enough upside to letting their credit card customers use their credit cards to make crypto purchases. The eighth-largest commercial bank in the US confirmed the new policy on Twitter early this year:

“We currently decline credit card purchases of cryptocurrency. We’ll continue evaluating our policy as this market evolves.”

Discover

Shortly after Capital One verified that it would no longer allow credit card holders to buy crypto, Discover followed suit with the announcement of a similar crypto ban. In an interview with Bloomberg, Discover Chief Executive Officer David Nelms said that cryptocurrency makes it too difficult to track money launderers:

“Financing purchases of virtual currencies creates headaches for banks that are required to monitor transactions for money laundering. Digital coins are attractive to criminals looking to hide illicit funds and to other people trying to evade the government’s eye.”

Bank of America

A few weeks after Bank of America announced that it would ban its credit card users from buying crypto, the second-largest US bank made headlines again when an annual filing revealed that it views cryptocurrency as a “competitive threat.”

“The [blockchain] technology could hamper the second-largest U.S. bank’s ability to comply with anti-money-laundering regulations, pose a competitive threat and force the company to spend more money to keep up with the times.”

Citigroup

Citigroup– the fourth-biggest bank in the US– joined with Bank of America to ban the use of credit cards to purchase crypto in February. However, company spokeswoman Jennifer Bombardier said that her bank might decide to reverse the policy if the demand for cryptocurrency changes:

“We will continue to review our policy as this market evolves.”

J.P. Morgan Chase

Given J.P. Morgan Chase CEO Jamie Diamond’s extremely negative view on cryptocurrency, it’s perhaps no surprise that his bank joined with Bank of America and Citigroup when they simultaneously announced that they would restrict their customers’ ability to buy cryptocoins. In an interview with CNBC from last year, Diamond said that bitcoin was just a fad.

“It’s worse than tulip bulbs. It won’t end well. Someone is going to get killed.”

Wells Fargo

San Francisco-based multinational financial services company Wells Fargo is the third largest bank by assets and the latest major bank to distance itself from crypto. In an announcement reported by Fortune, a representative from the bank said that it was simply following the industry trend.

“Customers can no longer use their Wells Fargo credit cards to purchase cryptocurrency. We’re doing this in order to be consistent across the Wells Fargo enterprise due to the multiple risks associated with this volatile investment. This decision is in line with the overall industry.”

Canada

Banks that have banned their customers from buying crypto in Canada include the Bank of Montreal and TD Bank. Here’s a closer look at the story behind both banks’ announcements.

TD Bank

The largest bank in Canada decided to stop letting its customers buy crypto with their credit cards in February- the same month that Citigroup, Bank of America and J.P. Morgan Chase instituted similar policies in the US.

“At TD, we regularly evaluate our policies and security measures, in order to serve and protect our customers, as well as the bank.”

Bank of Montreal

Rumors that Bank of Montreal would follow TD Bank’s lead in April began to circulate on Reddit, when a user shared the content of an internal email that announced the new anti-cryptocurrency policy. Those worries were confirmed when CoinDesk reached out to the bank for comment.

“I can confirm that we no longer allow the purchase of cryptocurrencies via Interac Online Payments or by using a retail consumer Mastercard-branded credit or debit card.”

Royal Bank of Canada

The latest Canadian bank to ban crypto is the Royal Bank of Canada. It stopped allowing its customers to use their credit cards to buy cryptocurrency in May.

“Effective immediately, RBC will no longer be allowing the use of RBC credit cards for transactions involving cryptocurrency. We regret any inconvenience this may cause.”

Europe

A number of banks in the UK and elsewhere in Europe have decided that letting their customers buy cryptocurrency with credit cards is more trouble than it’s worth. Here’s the rundown of banks with anti-cryptocurrency policies in Europe.

Nordea Bank

After the Finnish, Danish, Norwegian and Swedish banks Merita Bank, Unibank, Kreditkassen and Nordbanken merged in the late 90s, the end result was Nordea– a large Nordic financial services conglomerate that operates primarily in Northern Europe.

Though Nordea does let its customers buy crypto with their credit cards, it recently announced a new rule forbidding its employees to engage in any type of crypto trading. Spokesman Peter Svensson explained the rationale behind the new policy to Bloomberg:

“Every institution must decide on the details of their internal regulations specifying the rules for their employees’ investments and trading.”

Lloyds Bank

Lloyds Bank Group includes a number of subsidiaries including Bank of Scotland, Halifax Bank, and MBNA. The conglomerate announced its credit card crypto ban in February, shortly after a number of major American banks debuted similar policies. A spokeswoman from the group summed up the new policy for The Guardian:

“Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”

Virgin Money

  • Date: February 2018
  • Source: BBC

Richard Branson’s Virgin Money joined Lloyds Bank and the other banks that opted out of crypto in February. A Virgin Money representative spoke to the BBC about the policy:

“Following a review of our policies, I can confirm customers will no longer be able to use their Virgin Money credit card to purchase crypto-currencies.”

Danske Bank

The biggest bank in Denmark still allows its customers to buy cryptocurrency with their credit cards. However, it recently advised its customers not to do so and phased out the option of buying crypto-based financial instruments like derivatives and Exchange Traded Notes (ETNs).

“It is not possible to trade cryptocurrencies on our trading platforms. However, we monitor the market closely, and if the cryptocurrency market becomes more transparent and mature, we might reconsider this position.”

S-bank

The price of bitcoin dropped in March of 2018 when it was announced that three Finnish banks would begin blocking crypto wallet servicers provider Prasos Oy. One of these banks was S-bank, the first so-called “supermarket bank” in Finland.

The OP Group

With over 180 banks under its umbrella, OP Financial Group is one of the largest financial conglomerates in Finland. Like S-bank, it decided to stop processing Prosos Oy transactions in March.

Saastopankki

The third Finnish bank to terminate its relationship with Prasos Oy in March was Saastopankki, a banking group comprised of seven different subsidiaries.

China

The most important bank in China is the People’s Bank of China.

The People’s Bank of China

Though the government-run People’s Bank of China has run trials of its own prototype cryptocurrency, Chinese authorities seem to be dead set against letting Chinese citizens trade any sort of crypto asset. China has banned ICOs (Initial Coin Offerings), shut down domestic crypto exchanges and blocked access to foreign crypto exchanges. Authorities explained their recent move to the South China Morning Post:

“To prevent financial risks, China will step up measures to remove any onshore or offshore platforms related to virtual currency trading or ICOs.”

India

India-based banks that have dropped support for crypto include HDFC and the Reserve Bank of India.

HDFC

The month before the Reserve Bank of India dropped all support for crypto, the HDFC announced its plan to ban its customers from using their debit and credit cards to buy crypto assets:

“To ensure our customer’s security, we have decided to not permit usage of HDFC Bank credit, debit and prepaid cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies on merchants suspected to be dealing in cryptocurrency or online foreign exchange trading or both.”

The Reserve Bank of India

Similar to the People’s Bank of China, the Reserve Bank of India plans to develop its own cryptocoin. However, it no longer works with businesses or individuals that deal in cryptocurrencies. Quartz India reported that the bank released the following statement:

“It has been decided that, with immediate effect, entities regulated by RBI shall not deal with or provide services to any individual or business entities dealing with or settling VCs. Regulated entities which already provide such services shall exit the relationship within a specified time.”

Australia

Australia’s Bank of Queensland and the Commonwealth Bank of Australia have both implemented blocks on some types of cryptocurrency purchases.

The Commonwealth Bank of Australia

In the same month that banks in the US and Europe implemented cryptocurrency bans, the Commonwealth Bank of Australia decided to create a similar policy. The bank explained the decision in a blog post:

“Due to the unregulated and highly volatile nature of virtual currencies, customers will no longer be able to use their CommBank credit cards to buy virtual currencies. This will come into effect as of 14 February 2018.”

Bank of Queensland

The Bank of Queensland is the most recent Australian bank to adopt a cryptocurrency restriction. Its customers can no longer take out loans to purchase crypto assets. The bank’s revised loan agreement contract now contains the following statement:

“Any loan purpose that involves the acquisition of or usage of cryptocurrency is unacceptable”.

The Middle East

Iran Central Bank

After Iran plunged into a currency crisis, Iran’s central bank issued a circular in April that warned banks and credit institutions against selling or buying cryptocurrency. Authorities stated that they were concerned about money laundering.

“Banks and credit institutions and currency exchanges should avoid any sale or purchase of these currencies or taking any action to promote them.”

Alex Munkachy

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