The Commonwealth Bank (CBA) has banned its customers from buying bitcoin on credit cards after the recent fall in the value of the bitcoin, saying such purchases are no longer “appropriate.”
On Wednesday, the country’s largest bank began sending text messages alerting affected customers to the ban, which follows the same action by large overseas banks, after a drop of more than 50 percent in the bitcoin value of the peaks. last year.
The repression comes amid concern among foreign banks that more sharp falls in the price of bitcoin may leave some clients with large debts, creating an extra risk for banks.
It is understood that the CBA also has concerns about the risk to the financial well-being of customers from allowing people to employ to invest in such a volatile asset with credit card interest rates, usually close to 20%.
The CBA is not preventing customers from using their own money to buy bitcoin (compare bitcoin merchants here) because it will continue to allow purchases through debit cards or transaction accounts.
The bank said on its website that “it is no longer appropriate” for customers to buy bitcoin on their carton, pointing to price swings in bitcoin and its unregulated nature.
“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,” the bank said in a statement.
“Our customers may continue to buy and sell virtual currencies using other CommBank transaction accounts and their debit cards, provided they comply with our terms and conditions and all relevant legal obligations.
“We made this decision because we believe that virtual currencies do not meet the minimum standard of regulation, reliability and reputation when compared to the currencies we offer our customers.”
It is believed to be the first such ban by an Australian bank, but follows similar moves by overseas lenders, including Lloyds Bank in the United Kingdom, and US lenders such as JP Morgan Chase, Bank of America and Citi. These bans were allegedly enforced because of concerns about credit risk for banks.
It is understood that a relatively small number of CBA customers have bought bitcoin with credit cards, and there are a greater number of bank customers who deal in crypto-currency with debit cards.
Banks took action after the price of bitcoin fell from a peak of more than $ 18,000 before Christmas to $ 8,600 on Wednesday, a drop of over 50%. During the madness of recent months, a growing number of central bankers have warned about the criptomoedas risks, which the World Bank last week compared with the “Ponzi schemes.”
CBA is the largest credit card issuer in Australia, getting just under a quarter of the entire $ 53 billion credit card market.
Banks have faced increasing criticism in recent years about the risks to customers of credit card debt, leading to tougher lending standards in that part of the market.
So how can crypto enthusiasts purchase or trade bitcoin?
There are many ways to leverage on bitcoin’s volatility (in both up and down trends), and none of them require a bank account! So even if your Commonwealth bank denies you the ability to transfer your own money to cryptocurrency exchanges, you can still use alternate methods such as credit cards or Paypal to make small, yet leveraged, deposits, with CFD brokers. A good place to start is www.cryptobrokers.cc – a comparison website that compares CFD offerings, bitcoin exchanges and other regulated entities which facilitate crypto trading.