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Banks Not Allowing Credit Card Purchases of Cryptocurrency

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Banks Not Allowing Credit Card Purchases of Cryptocurrency

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Wells Fargo Bank has recently announced that its customers will no longer be able to make purchases of cryptocurrency using their bank-issued credit cards. This move is consistent with the stated practice of several other major U.S. banks including J.P. Morgan Chase, Citigroup and Bank of America as well as foreign banks including Canadian-based Toronto-Dominion Bank and the United Kingdom’s Lloyds Banking Group. Earlier this year, Mastercard and Visa reclassified cryptocurrency purchases as cash advances rather than a standard purchase.

The position taken by banks and credit card issuers is not surprising given the volatile nature of cryptocurrency. As an example, the value of Bitcoin, the first and still widely popular cryptocurrency, fluctuates many times a day. The value of a single unit of Bitcoin ranged from $6,500 to $7,500 in April, 2018, spiked as high as $9,845.90 on May 4, 2018 and was at $7,709.73 at the time of this update.

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