More banks review lending to customers to buy Bitcoin

MAJOR high street banks are reviewing whether to let customers buy Bitcoin on their credit cards, they said last night. It follows the decision by Britain’s biggest bank, Lloyds, to ban customers using cash borrowed on credit cards to buy cryptocurrency over fears that they could run up huge losses.

Barclays Bank said it was keeping the matter under “close review”, while Santander said it was continuing to monitor the situation.

According to LENDEDU, a personal loan research firm, more than 18 per cent of Bitcoin investors have used borrowed money to trade the cryptocurrency. It raises fears that people buying Bitcoin with money borrowed on credit cards will become laden with debt if its price falls further.

The price of Bitcoin has already fallen by 57 per cent from £14,000 in December to less than £6,000, and Lloyds fears that it could end up footing the bill for unpaid debt should the price fall any lower.

It is believed that hundreds of thousands of British people invested in the cryptocurrency last year amid its extraordinary 13-fold increase.

A Barclays spokesman said: “We constantly review our protections for customers as a responsible bank and lender, and are keeping this matter under close review.

“At present UK customers can use both their Barclays debit card and Barclaycard credit card to purchase cryptocurrency legitimately. We take precautions to assess affordability before extending credit, flag and prevent any suspicious transactions and also closely monitor credit risk.”

A Santander spokesman said: “We will continue to monitor cryptocurrencies as we do with any other factors that could impact our customers.

“We apply rigorous lending criteria and monitor customer spending. If we feel someone is at risk of getting into financial difficulty we have support measures in place to help them.”