Business 13 June 2018

Gerald Fenech

Wells Fargo blocks credit card holders from buying cryptocurrency

U.S. banking giant Wells Fargo will no longer allow its customers to purchase cryptocurrencies using its credit card, according to a Fortune report.

On Monday, the San Francisco-based bank—considered to be the third largest in the U.S. by assets—said the decision to prohibit its clients from buying digital coins “is in line with the overall industry” given “the multiple risks associated with this volatile investment,” which could put Wells Fargo’s customers into a certain amount of extra risk due to volatility and rapidly fluctuating prices.

The decision, however, doesn’t appear to be set in stone since the Wells Fargo spokesperson said they plan to evaluate their position “as the market evolves.”

Wells Fargo is the latest banking giant to have banned the purchase of cryptocurrencies with its cards. In February, three of the largest U.S. banks—JPMorgan Chase, Bank of America and Citigroup—announced they would no longer allow the purchase of cryptocurrencies with their credit cards. Several weeks later, JPMorgan said that financial institutions would eventually “face the risk that payment processing and other services would be disrupted by technologies, such as cryptocurrencies.” It’s worth noting that JPMorgan currently faces a lawsuit, which claimed that the investment bank had been charging exorbitant interest rates on cryptocurrency purchases.

The list of banks that have banned cryptocurrency has grown quite considerably of late. The Toronto-Dominion Bank in Canada, one of the largest banks in North America, sent an email to its customers informing them that it’s also banning cryptocurrency purchases with its credit cards. The bank said that these measures were being taken to protect customers as well as the bank. Other banks which have banned cryptocurrency purchases include India’s HDFC Bank, Lloyds Banking Group as well as Virgin Money, although the latter two have placed restrictive measures rather than outright banning crypto-related purchases.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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