With no regulation surrounding virtual and cryptocurrencies, it is common for banks to ban usage of credit cards to procure them. Commonwealth Bank of Australia(CAB) today released a statement stating that it is banning the use of credit cards for purchasing crypto-currencies such as bitcoin using credit cards.
This comes as no surprise to many who have been following the recent bans on credit cards by different banks across the globe.
The announcement mentioned the reason behind the CAB action against cryptocurrency. It reads as follows.
“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. This will come into effect as of 14 February 2018.”
They also added,
“We have made this decision because we believe virtual currencies do not meet a minimum standard of regulation, reliability, and reputation when compared to currencies that we offer to our customers. Given the dynamic, volatile nature of virtual currency markets, this position is regularly reviewed.”
However, they are not entirely restricting the purchase of cryptocurrencies using other payment methods such as debit card or online transaction.
By making this announcement, they now become the first bank in Australia to ban usage of credit cards to buy cryptocurrency.
The move is made to protect the interest of their users. The volatile nature of bitcoin and other cryptocurrency makes it extremely risky. The recent 64% dip for bitcoin in the last month was not encouraging for many investors and weak investors would have easily lost a lot of money there.
Other banks around the world are also banning cryptocurrency purchase. Indian bank, CITI had recently sent emails to their customers, citing the ban on buying cryptocurrency through all the methods. These seem to be a bummer for CITI bank users. However, major banks in India still offer the ability to buy virtual currencies.