Three major U.S. banks recently announced that they will decline credit card purchases of digital currency. The three banks - Bank of America, Citigroup, and JPMorgan Chase – revealed the policy change at the end of the week, with JPMorgan Chase citing the “volatility and risk” involved in such transactions. In a statement to CNBC, a bank spokesperson said:
"At this time, we are not processing cryptocurrency purchases using credit cards, due to the volatility and risk involved. We will review the issue as the market evolves."
The decision comes on the heels of recent reports indicating that about 18 percent of recent digital currency investors relied on credit cards to finance their investments. More than a fifth of those investors have found themselves unable to repay their credit card balances.
In a recent LendEdu survey upon which those reports were based, nearly 88% of respondents who used credit cards to buy cryptocurrency said that they would rely on gains from those investments to repay their balance.
With Bitcoin’s price down by more than 50% from its December highs, banks and other credit card issuers have become increasingly concerned about the potential losses they may incur if borrowers are unable to pay those balances.