The second-largest U.S. bank is banning customers from purchasing cryptocurrencies using its credit cards, according to Bloomberg reports.
Bank of America (BofA) officially announced it “will begin declining credit card transactions with known cryptocurrency exchanges” today through a memo distributed to employees on Thursday (Feb. 1). The anti-crypto policy will apply to both business and personal BofA-branded cards. The news was confirmed by company spokeswoman Betty Riess.
The financial institution (FI) joins a growing list of banks issuing similar policies, including Capital One Financial Corp. and Discover Financial Services. In a similar move, payments processor Visa has also terminated its relationship with cryptocurrency card provider WaveCrest.
BofA and Citigroup recently reviewed their internal policies regarding crypto purchasing amid concerns about money laundering and other potentially nefarious acts tied to engaging with virtual currencies. Discover CEO David Nelms said cryptocurrencies cause too many headaches for banks, forcing them to devote extensive time and resources into monitoring transactions for potentially criminal acts.
Despite CEO Jamie Dimon referring to bitcoin as a “fraud” in 2017, JPMorgan Chase & Co. is among the FIs still allowing cryptocurrency purchases through company-branded credit cards. Dimon recently retracted his infamous comment.
It’s been an interesting week for cryptocurrency, with virtual currencies of all shapes and sizes tumbling early on Friday (Feb. 2) morning, several plunging more than 20 percent. Reuters reported early that bitcoin had slipped below $8,000 per coin, past what used to be a psychologically important threshold at $10,000. The volatile digital coin was trading at just $7,910 and had lost approximately 30 percent of its value in a week’s time.
Investors appear to be fleeing the crypto sphere amid impending and potential regulatory initiatives around the globe and increased scrutiny of virtual currency trading. Rumor has it that the changes taking shape might result in pockets of total restriction, depending on which country or region is involved.