Lloyds Banking Group has banned its customers from buying Bitcoin with credit cards

LLoyds Banking Group has just announced that it has banned its customers from purchasing Bitcoin and other cryptocurrencies using its credit cards.

The ban, which starts today, affects customers of LLoyds Bank, Halifax, Bank of Scotland and MBNA. It comes amid fears about the stability of cryptocurrency, after Bitcoin had its worst week in almost five years last week, dropping below $ 8,200 (£5,800).

“We continually review our products and procedures and this is part of that,” explained a spokesperson for the banking group.

Bitcoin’s value has dropped by more than 50% since December, when it hit a record high of $19,340 (£13,700). However, its value is still considerably greater than this time last year, when it was worth little more than $1,000 (£705).

Lloyds Banking Group is no doubt worried that if people buy cryptocurrency using its credit cards, it could end up footing an enormous bill should the various different bubbles burst.

In September last year, China outlawed initial coin offerings (ICOs), a type of crowdfunding based around cryptocurrency, stating that they have “seriously disrupted the economic and financial order”. South Korea has also said it plans to do something but has offered contradicting statements as to what. 

Recently, the UK Treasury announced plans to crack down on cryptocurrencies, including Bitcoin, to stop them being used for criminal activity including tax evasion, terrorism and money laundering.

Even Facebook has announced it is banning adverts that promote cryptocurrency as part of a wider initiative to get rid of “misleading or deceptive promotional practices”.

However, worries about the stability of cryptocurrency haven’t deterred everyone. Samsung last week announced that it has begun to produce new chips specifically for mining of cryptocurrencies.

Although details of its plans are somewhat scant, it confirmed in a statement to the BBC “Samsung’s foundry business is currently engaged in the manufacturing of cryptocurrency mining chips.”