Lloyds and Virgin Money ban bitcoin card purchases

Virgin followed Lloyds in implementing the ban amid fears customers could be left in debt as the cryptocurrency’s value deflates.

It is thought the banking giant and its challenger are the first in the UK to ban credit card customers from borrowing to buy the digital currency has more than halved in value in recent months.

Both bank’s bans only apply to their credit cards, not debit cards.

Significant numbers of people in Britain are thought to have bought Bitcoin as it surged in value, peaking at nearly $20,000 (£14,465) in December.

However, the value of the cyptocurrency, which critics say is used by criminals and rogue states to carry out clandestine transactions,has since plummeted to around £5,700 leading to concerns that people who borrow money to purchase it will be left with large debts if the virtual currency continues to depreciate.

The move also 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.

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