Canada’s Toronto-Dominion Bank (TD Bank) announced recently that it has stopped allowing its customers from using the credit cards to purchase the cryptocurrencies. The bank is currently conducting a review of the virtual currency phenomenon and has suspended the crypto purchases via credit cards.
According to the bank’s spokesman, the company regularly reviews its policies and security concerns as a mechanism to protect and serve its customers well. The company made the decision to suspend the service after closely monitoring the volatility of the popular virtual currencies and the probability that the customers might at one point fail to pay their debts in case the value of the cryptocurrencies shrink with time.
The move comes after several US banks stopped allowing customers to make the purchase of Bitcoin and other digital currencies using credit cards. For instance, the value of Bitcoin escalated last year, trading for over $20,000 per token but has since fallen off and it’s currently trading at $13,000, a drift that has significantly worried the banks and investors.
TD Bank adds to the growing number of banks that have prohibited their clients from using credit cards to make the cryptocurrency purchases. The banks that have banned the service are mostly from the US and UK which include Capital One, Bank of America, Citigroup, JP Morgan Chase, Halifax, Bank of Scotland, Lloyds, and MBNA.
The Royal Bank of Canada stated recently stated that it allows the transaction of the cryptocurrencies on its credit and debit cards in limited situations. However, the bank warned its customers about the possibility of plunging into debt that can render them the inability to repay the bank considering the volatility of the market. The bank is still reviewing its policies and looking for ways to support its clientele.
A survey conducted by LendEDU recently confirms that majority of investors prefer using their credit cards to purchase Bitcoin and other cryptocurrencies. As a result, most banks have decided to take precautions to curb the trend that could lead them into more troubles since the cryptocurrencies in most countries are not regulated.