More credit-card issuers are ditching bitcoin.
Three of the largest banks in the U.S. said Friday that they would no longer permit credit-card customers to buy bitcoin with their credit cards. The decisions were announced after a brutal week for bitcoin prices, which have plummeted more than 50% from their peak in December.
Citigroup Inc. said late Friday that it has decided to no longer permit its credit card customers to buy bitcoin with their Citi credit cards. The bank is in the process of implementing the block, which will apply to Citi credit-card holders globally. “We will continue to review our policy as this market evolves,” said a bank spokeswoman.
The bank joins JPMorgan Chase & Co. and Bank of America Corp., which earlier Friday also said they won’t allow credit-card customers to use credit cards to buy bitcoin.
The Wall Street Journal reported on Jan. 25 that banks were becoming concerned about the risks associated with credit cards being used to purchase bitcoin. Capital One Financial Corp. prohibited credit-card purchases of bitcoin in January and Discover Financial Services banned them in 2015.
With the latest announcements, most top credit-card issuers by volume won’t allow bitcoin purchases. One of the biggest concerns for banks is that bitcoin purchases will push up their card losses. That includes cardholders who don’t pay their bills when the price of bitcoin falls below what they paid to buy it with the card.
