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The Lloyds Banking Group is the first major lending institution in the UK to prohibit the purchase of crypto currencies with its credit cards. This step follows similar prohibitions by US banking institutions, such as JPMorgan Chase, Bank of America and Citigroup. It is a very expensive and highly competitive business and bankers are concerned that clients will suffer huge loss and will not be able to pay back their debt.
The LONDON - Lloyds Banking Group is the first UK bank to prohibit its clients from using their credit cards to buy bit coins and other crypto currency, according to a Daily Telegraph article. Lloyds will tell its 9 million credit cardholders that The Telegraph is blocking efforts to buy electronic currency.
According to the reports, customer credit cards are not locked. Lloyds spokesperson said the move was made to "protect" consumers from prohibitive loss on Bitcoin, the Telegraph said. Prohibition is enforced by means of a black list of the main vendors of crypto currencies, which blocks attempts to enter into deals with these vendors.
It is the first such step by a British bank, but follows the announcements of similar prohibitions by three major US creditors. The JPMorgan Chase, Bank of America and Citigroup have already introduced similar prohibitions. The prohibition on the use of Lloyds' credit cards to buy electronic currency comes at a time of hugely volatile markets.
Over the past few month, Bitcoin's prices have dropped from around $20,000 per ounce to as low as $7,700 on Friday, with sharp fluctuations in both direction still a common characteristic. Friday, on Friday, Bitcoin dropped up to 15% of its value in early session trades before ending the session in profit.
Bankers fear that such savage fluctuations will leave their clients at the mercy of severe loss, so that they will not be able to pay back their credit cards. On Monday, the prices for bit coins were again below the $8,000 mark, which is around 2.5% lower in early mornings, as the following graph shows: