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Looming Crackdown on Cryptocurrency

Samantha Mitchell

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Cryptocurrency Crackdown

Lloyds Banking Group, which is one of the largest financial institutions in Britain, has banned its customers from applying their credit cards for purposes of purchasing Bitcoin. This came at a time when the value of this largest Cryptocurrency halved within a period of two months.

On Monday, February 5, 2018, Lloyd Banking Group that has a total of nine million users of its credit card, warned that any attempt to purchase Bitcoin through the use of these credit cards would be blocked.

As the value of Bitcoin rose towards the end of 2017, it is believed that close to million consumers invested in this virtual currency. In December 2017, the value of this largest virtual currency by market capitalization hit a high of 14,000 Euros. This was before it would crumble down to less than 6,000 Euros as witnessed recently.

What Lloyds Bank Fears

UK BanksThe greatest fear that this financial organization is concerned with is being pushed to foot the bills of all the unpaid debts should Bitcoin’s currency continue to come down. Lloyds Bank has a large number of credit card users, and they include the MBNA, Bank of Scotland, as well as Halifax. All of these will be banned from buying the virtual currency. This will take effect on Monday, February 5, 2018, through the blacklist technology that flags up the sellers.

According to a senior official from Lloyds Banking Group, the decision was reached to safeguard the consumers in what is viewed as a pre-emptive directive of lowering the risks that are caused by the volatile Cryptocurrency.

Other Banks Expected to Follow Suit

A number of other banking institutions in the UK are expected to follow the steps Lloyds Banking Group has taken. This is even after some of the leading banks in the United States like the Citigroup, Bank of America, and JP Morgan all confirmed the plans to ban their users from purchasing the Cryptocurrency. The move by these leading financial service providers has been witnessed at a time when there is an international outcry on how some of the top cryptos are being used. There are even fears that some customers could be using the virtual currencies for money laundering businesses. Theresa May, the British Minister, is one of the international leaders who has come out to warn of the dangers these new sensations in the financial market might cause. She warned that criminals could use the Cryptocurrencies to carry out illegal tradings.

Is Gold the Next Alternative?

With the current happenings in this market, a number of investors are currently looking for other alternative ways of keeping their hard earned money. Gold is one of their alternatives, and this has seen a number of gold merchants in the Europe report five-fold growth in the demand for this precious substance. All these have been triggered by the fears that Bitcoin is soon approaching its end.

Social media sites have been flooded with messages from concerned crypto investors who are now afraid of losing their savings in this once steady Cryptocurrency. Peter Boockvar, who is a veteran at the Wall Street, has warned of a looming epic crash, which might end up splashing 90% from Bitcoin.

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