HSBC and nationwide banks ban crypto purchases with credit cards in the UK
HSBC and Nationwide Building Society have become the latest major UK banks to ban their customers’ crypto purchases, according to Bloomberg.
The move follows a notice from UK regulator the Financial Conduct Authority (FCA), citing crypto as a high-risk investment.
HSBC, nationwide crypto ban in line with FCA rules
according to report, HSBC restricted consumers from making crypto purchases with credit cards last month. The bank said the decision was made due to an apparent financial risk to customers.
Meanwhile, Nationwide reportedly issued an email to its customers on Thursday informing them of limits on crypto purchases:
“We will not allow payments to crypto exchanges with a national credit card […] Neither you nor other older cards will be able to use a national credit card to buy cryptocurrency.”
Is crypto a high risk investment?
The cryptocurrency market is highly volatile, with prices fluctuating quickly and frequently. This volatility can result in significant gains or losses for investors, depending on their timing and market knowledge.
The lack of regulation in the crypto industry can also make it a breeding ground for fraud and other illegal activities.
Many cryptocurrencies have been associated with criminal activities such as money laundering, drug trafficking and terrorist financing.
HSBC. Image: PYMNTS
The security of cryptocurrency exchanges and wallets is a significant concern. Cyber attacks, hacking and theft are common in the cryptocurrency industry, and investors can lose their money if their wallets or exchanges are compromised.
In addition, the adoption and use of crypto is still limited, meaning that its value is often driven by speculation rather than actual use.
The lack of widespread acceptance and use of crypto as a legitimate form of payment makes their value unstable and unpredictable.
Attitude towards crypto
Banks’ views on cryptocurrencies are mixed. Some banks see cryptocurrencies as a potential threat to their business model, as they could undermine the traditional financial system and compete with banks’ services.
Other banks are exploring opportunities to integrate cryptocurrencies into their business operations or offer cryptocurrency-related products and services to their customers.
Crypto total market cap at $991 billion on the daily chart | Chart: TradingView.com
A growing number of UK institutions are restricting crypto purchases. Starling Bank and Santander UK set similar limitations on fund transfers to crypto exchanges in November 2022.
Overall, banks’ attitudes toward cryptocurrencies are evolving as the technology and market continue to evolve.
While some banks remain cautious and skeptical, others are exploring opportunities to leverage cryptocurrencies and blockchain technology to improve business operations and offer new services to their customers.
Despite HSBC taking a crypto-averse stance on whether consumers are allowed to buy cryptocurrencies, the financial institution has recently filed trademark applications for a wide variety of digital currency and metaverse goods. Also, HSBC is now part of the metaverse.
– Featured image from The Sportster
