Three more credit card issuers have announced that they will automatically decline transactions associated with purchases of bitcoin and other cryptocurrencies, adding their names to a growing list of legacy financial institutions who have adopted hostile policies toward cryptocurrency in the wake of the recent market decline.
Three More Credit Card Issuers Ban Bitcoin, Cryptocurrency Purchases
Effective immediately, customers will no longer be able to use JPMorgan Chase, Bank of America, or Citigroup credit cards to finance their cryptocurrency investments, according to a report from Bloomberg.
The move deals another serious blow to the already-battered cryptocurrency markets, as JPMorgan and Bank of America are the two largest US banks, while Citigroup ranks fourth on the list.
A recent survey from LendEDU found that 18 percent of cryptocurrency investors financed their purchases with a credit card. While some likely did so out of convenience or to accrue rewards points, the survey also found that more than one-fifth carried the balance, perhaps indicating that they were gambling that they would be able to use profits from a price increase to pay back their debts.
This, a JPMorgan spokesperson said, presents the card issuers with too much credit risk, as these customers are more likely to default on their payments if the market heads south, as it has in recent weeks.
This updated policy brings the three card issuers in line with credit card processing giants Capital One and Discover, who had already banned customers from using credit cards to purchase cryptocurrency.
Meanwhile, Zerohedge reports that Coinbase has begun sending customers notices indicating that credit card processors who still allow cryptocurrency purchases have begun charging additional “cash advance” fees for transactions made at Coinbase and other similar brokerage platforms.
Fintech Startups Embrace Cryptocurrency
Notably, while credit card issuers move to ban bitcoin, upstart fintech firms are racing to provide investors with more convenient and user-friendly ways to buy and sell cryptocurrency.
Digital payments processor Square recently provided US customers in 46 states with the ability to buy, sell, and hodl bitcoin from directly within its popular Cash App, which ranks as one of the most widely-used financial apps in both the Google Play and App Stores.
Mobile brokerage platform Robinhood, meanwhile, is gearing up to launch a full-scale cryptocurrency trading platform this month, and more than one million people have already pre-registered for the service.
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