Bloomberg recently published a report saying the three giants from the banking world, JPMorgan Chase, Bank of America and Citigroup, will not allow their clients to buy cryptocurrencies with their credit cards.
According to the source, JPMorgan Chase introduced the ban yesterday, while Citigroup and Bank of America started with this practice two days ago.
Spokespeople of Bank of America said the ban will not affect the purchases of cryptocurrencies made with debit cards or through ATMs. According to the bank, the new measure was introduced to prevent money laundering operations and to prevent the thieves and forgers of credit cards to abuse their credit cards to acquire cryptocurrencies.
Furthermore, this is risky for the credit companies when it comes to the probability of non payment, because the investors tend to get into debt to buy cryptocurrencies and their price is highly volatile. In the case when the price of these cryptocurrencies falls sharply, many debtors could be incapable of repaying the debts from their credit cards, which brings more problems for the banks.
Martina Hund-Mejean, the CFO of Mastercard, said the cross-border exchange volume of the company increased by 22% this year and this is because many people were buying cryptocurrencies using credit cards. However, she said this tendency decreases as the prices on the cryptocurrency market go down.
The CFO of Mastercard added: “Effectively, we are not planning to continue with this to a large degree. Last week, when some of the prices went down, we noticed the tendency of buying cryptocurrencies with credit cards was slowing down.”
On the other hand, this prohibition does not comes as a surprise. Last week, Bank of America and Citigroup announced a re-evaluation of their policies when it comes to using credit cards to buy cryptocurrencies. The list of the companies prohibiting the use of credit cards for the purchase of cryptocurrencies is getting bigger. Other companies, such as Capital One and Discover Financial Services are already on this list.