Customers holding credit cards with Bank of America (NYSE:BAC), J.P Morgan Chase (NYSE:JPM) and Citigroup (NYSE:C) are now unable to purchase cryptocurrencies with their credit cards. CNBC was the first to report this news yesterday as all three banks confirmed their ban.
A representative at J.P Morgan Chase told CNBC:
“At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved. We will review the issue as the market evolves.”
This is a huge blow to American investors, as most use their credit cards to enter the market purchasing either Bitcoin (BTC) or Ethereum (ETH) initially, with various exchanges. The cryptocurrency market in the month of January took some fairly large hits and it remains unclear as to how that it has affected the major banks. Were investors dumping tons of money into the market but with losses, no unable to pay their credit card statements? Possibly.
Citigroup bank states that they will continue to review their current ban and policy and may revoke it as the market “evolves”.
The ban by large financial institutions isn’t new, as Capital One Financial (NYSE:COF) implemented the ban back in early January and Discover Financial Services (NYSE:DFS) hasn’t allowed these purchases since 2015.
There has yet to be a statement by Coinbase, the United State’s largest exchange, as they currently allow their U.S members to purchase cryptocurrencies via credit card on their platform.
It seems like some individuals irresponsible investing is now affecting a majority of U.S crypto investors now. Unfortunately, I do not see these banks revoking this anytime soon. The cryptocurrency market will remain highly volatile, as many countries are still currently trying to regulate cryptocurrencies. It is unclear as to what these banks will need to see, to allow these purchases to occur again. They could possibly set limits as to how much is allowed to be invested in cryptocurrency, per month. However, that would take a lot of manpower for verification of these purchases.
None-the-less, if you are looking to purchase cryptocurrency and have been using these credit cards, you still have the option to link your bank account to the major exchanges. I’m unsure if banks are able to flat out ban transfers made from your bank account to these exchanges in the future but it wouldn’t surprise me.
Featured Image: ThePointsGuy