Crypto Credit Crunch: Virgin Money Bans Credit Card Customers Buying Cryptocurrencies
Virgin Money said
“Following a review of our policies, I can confirm customers will no longer be able to use their Virgin Money credit card to purchase crypto-currencies.”
This follows a similar move by Lloyds Banking Group earlier in the month citing concerns that customers are at risk of racking up unsustainable amounts of debt speculating on the volatile asset.
Neither of the moves extend to debit cards or bank transfer purchases, nevertheless, some in the cryptocurrency community greeted this news with scepticism and disdain.
Twitter user @PrisonPlanet complained that it would be a “very dodgy precedent to set” if banks started to control how their customers spent their own money.
Lloyds deciding what you can and can’t legally buy with your own money. Very dodgy precedent to set. https://t.co/Irx4FarxSN
— Paul Joseph Watson (@PrisonPlanet) February 5, 2018
Additionally, other critics of the new policy argue that the credit risk customers pose to these companies should be a factor in whether or not the customer should be granted credit in the first place.
Indeed, this is usually the case with high street bank Barclays saying that they
“take precautions to assess affordability before extending credit, flag and prevent any suspicious transactions and also closely monitor credit risk”.
However, the logic in the decision of Virgin Money and Lloyds Banking Group is understandable given the fast pace at which cryptocurrencies have been the target of speculative investment.
Furthermore, many Twitter users, in response to @PrisonPlanet, pointed out that money offered in credit does not belong to borrower and that Virgin Money and Lloyds Banking Group are well within their rights to set the terms of said credit, especially when that credit is to be used to speculate on an extremely volatile asset.
That only affect credit cards, not debit cards. Basically, your money = your choice. But the bank's money (credit) = their choice. No scandal here in my opinion.
— Alexis Bietti (@alexisbietti) February 5, 2018
The past year has seen rapid growth in the value of cryptocurrencies, having grown from a total market capitalization of $19bn this time last year to a peak of $815bn in January 2018. The current capitalization sits at $412bn as of February 11th 2018.