US and British banks ban bitcoin purchases using credit cards

Bitcoin, the biggest and best-known cryptocurrency, has fallen dramatically from its peak of $19,187 recorded on December 16 and was down by 6 percent to $7,700 at 1100 GMT on Bitstamp. (Reuters)
Updated 05 February 2018
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US and British banks ban bitcoin purchases using credit cards

Banks in Britain and the US have banned the use of credit cards to buy Bitcoin and other “cryptocurrencies,” fearing a plunge in their value will leave customers unable to repay their debts.
Lloyds Banking Group, Britain’s biggest lender, said on Sunday it would ban its credit card customers from buying cryptocurrencies, following the lead of US banking giants JP Morgan Chase & Co. and Citigroup.
The move is aimed at protecting customers from running up huge debts from buying virtual currencies on credit, if their values were to plummet, a Lloyds spokeswoman said.
Concerns have arisen among credit card providers because their customers have increasingly been using credit cards to fund accounts on online exchanges, which are then used to purchase the digital currencies.
Last week Mastercard, the world’s second-biggest payments network, said customers buying cryptocurrencies with credit cards fueled a 1 percentage point increase in overseas transaction volumes in the fourth quarter.
At that time Bitcoin was staging a spectacular rise in value, reaching a peak of $19,187 on December 16 on the Luxembourg-based Bitstamp exchange.
But the biggest and best-known cryptocurrency has since fallen dramatically and on Monday was down by 6 percent to $7700 at 1100 GMT on Bitstamp, extending losses from Friday amid worries of a global regulatory clampdown.
A spokeswoman for Chase bank said it is not currently processing credit card purchases of cryptocurrencies because of the volatility and risk involved, while a Citi spokeswoman confirmed a similar ban, but did not give a reason.
The bans extend only to credit card purchases, with debit card users still able to buy cryptocurrencies.
“Across Lloyds Bank, Bank of Scotland, Halifax and MBNA, we do not accept credit card transactions involving the purchase of cryptocurrencies,” the Lloyds spokeswoman said in an email.
Lloyds did not say how it planned to enforce the ban, although the Telegraph newspaper reported on Sunday that its credit card customers will be blocked from buying Bitcoin online through a “blacklist” that will flag sellers.
A spokeswoman from the Royal Bank of Scotland declined to comment on the bank’s policy.
Other leading British lenders including Barclays, and HSBC did not immediately respond to requests for comment on whether they permit credit card purchases of cryptocurrencies or had any plans to change their policies.
Concerns about the use of Bitcoin and other such currencies extend beyond the use of credit cards for borrowing.
British Prime Minister Theresa May has said Britain should take a serious look at digital currencies such as Bitcoin because of the way they can be used by criminals.


India suspends Kashmir border trade with Pakistan

Updated 19 April 2019
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India suspends Kashmir border trade with Pakistan

  • Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries
  • India said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency”

NEW DELHI: India has suspended trade across its disputed Kashmir border with Pakistan, alleging that weapons and drugs are being smuggled across the route, as tensions simmer between the nuclear-armed neighbors.
Kashmir has been on edge since a February suicide attack that killed 40 Indian paramilitaries and brought the two countries to the brink of war with cross-border air strikes.
On Thursday, India’s government, which is in the middle of a tough national election, said it had reports that trade on the border was being “misused by Pakistan-based elements for funnelling illegal weapons, narcotics and fake currency.”
It also said many of those trading across the Line of Control, which divides Kashmir into zones under Indian and Pakistani control, had links to militant organizations.
The home ministry said trade would be suspended until a stricter inspection mechanism is in place.
The cross-border trade is based on a barter system, with traders exchanging goods including chillies, cumin, mango and dried fruit.
It began in 2008 as a way to improve strained relations between New Delhi and Islamabad, who have fought two of their three wars over the disputed region.
The Indian Express newspaper said Friday that 35 trucks carrying fruit traveling from the Indian side of the border had been stopped after the government order.
Trade on the border has been suspended before, including in 2015, when India accused a Pakistani driver of drug trafficking.
The latest move comes after India withdrew “Most Favoured Nation Status” — covering trade links — from Pakistan after the February attack, which was claimed by the Pakistan-based Jaish-e-Mohammed Islamist group.
Islamabad has denied any involvement in the attack.
India’s Hindu nationalist Prime Minister Narendra Modi has made national security a key plank of his re-election campaign, pointing to the recent flare-up of violence as he battles the center-left opposition Congress party.
He is seeking a second term from the country’s 900 million voters in the mammoth election which kicked off on April 11 and runs till May 19. The results will be out on May 23.