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Lloyds bans purchase of Bitcoin over consumer debt fears

The cryptocurency halved in value in recent months, triggering the ban.

Ban: The bank has banned the purchase.
Ban: The bank has banned the purchase. PA

Lloyds Banking Group has banned credit card customers from buying Bitcoin amid fears they could be left in debt as the cryptocurrency's value deflates.

The banking giant, which includes Halifax, MBNA and Bank of Scotland, is thought to be the first in the UK to ban credit card customers from borrowing to buy the digital currency, which has more than halved in value in recent months.

Bitcoin's slide has led to concerns that people who borrow money to purchase it will be left with large debts if the virtual currency continues to depreciate.

Significant numbers of people in Britain are thought to have bought Bitcoin as it surged in value, peaking at nearly £14,465 in December.

As news of Lloyds's ban emerged on Sunday the value was around £5,700.

A spokeswoman for the banking group said: "Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies."

The move follows warnings by regulators in the US, South Korea, China, Russia and India over the cryptocurrency.

Germany's Bundesbank has also called for global regulation of Bitcoin and France's finance minister wants tougher rules for cryptocurrencies.

Meanwhile, Facebook banned adverts for Bitcoin and other cryptocurrencies on its sites after recent criticism from users about scams and hoaxes being promoted in their newsfeed.

Critics say cryptocurrencies are used by criminals and rogue states to carry out clandestine transactions.

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