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Lloyds Banking Group credit card customers are no longer able to buy bitcoin

PUBLISHED: 08:35 05 February 2018 | UPDATED: 08:35 05 February 2018

Lloyds Banking Group has banned purchases of bitcoin and other cryptocurrencies on credit cards. Picture: Thinkstock.

Lloyds Banking Group has banned purchases of bitcoin and other cryptocurrencies on credit cards. Picture: Thinkstock.

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A UK banking giant has banned credit card customers from buying bitcoin amid fears they could be left in debt as the cryptocurrency's value drops.

Lloyds Banking Group – which includes Halifax, MBNA and Bank of Scotland as well as its flagship brand – is thought to be the first in the UK to ban customers from borrowing to buy the digital currency, the value of which has plummeted in recent months.

Significant numbers of people in Britain are thought to have bought bitcoin as it surged in value, peaking at nearly 20,000 US dollars (£14,465) in December.

But its slide has led to concerns that people who borrow money to purchase it will be left with large debts if the virtual currency continues to depreciate.

As news of Lloyds’s ban emerged on Sunday the value was around 8,000 dollars (around £5,700).

A spokeswoman for the banking group said: “Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies.”

The move follows warnings by regulators in the US, South Korea, China, Russia and India over the cryptocurrency.

Germany’s Bundesbank has also called for global regulation of bitcoin and France’s finance minister wants tougher rules for cryptocurrencies.

Meanwhile, Facebook banned adverts for bitcoin and other cryptocurrencies on its sites after recent criticism from users about scams and hoaxes being promoted in their newsfeed.

Critics say cryptocurrencies are used by criminals and rogue states to carry out clandestine transactions.

Earlier this month, US billionaire Warren Buffett ruled out a foray into cryptocurrencies, warning that the bitcoin boom will “come to a bad ending”.

Despite the slide, Bitcoin’s current value is significantly higher than its 900 dollar (£640) position recorded in January 2017.

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