HSBC holdings and Nationwide Building Society are banning crypto purchases with credit cards for retailers. This shows that the regulations and restrictions on digital assets are being tightened. At the same time, more banks are joining the growing list of such restrictions. Even for debit cards, there will be specific limits beyond which users cannot make purchases in a single day.
No more crypto purchases with credit cards
One of the primary reasons that banks are restricting the use of credit cards from buying crypto is the possibility of scams. Plus, there is always the eventual risk of buying on credit; the customer may default on their payments if the price of the crypto they purchase falls. Nationwide has also applied limits to debit cards for buying crypto to be even safer. The daily limit is 5,000 British pounds or $5,965.
HSBC also took the same step last month because of the risk it poses for customers. The Financial Conduct Authority (FCA) has also pointed out these issues and risks related to cryptocurrencies. Some other banks that have also imposed restrictions on crypto transactions are Natwest group, Lloyds banking and Santander. These restrictions are targeted towards crypto exchanges, primarily Binance.
UK’s crypto regulatory situation
The regulatory situation for cryptocurrencies in the UK is somewhat complex and continues to evolve. At a high level, the UK government and regulators have generally taken a cautious approach to cryptocurrencies, recognising their potential benefits and risks.
The Financial Conduct Authority (FCA) is the primary regulatory body overseeing cryptocurrencies in the UK. In 2020, the FCA introduced new regulations that required all UK-based cryptocurrency businesses to register with the agency and comply with anti-money laundering (AML) and counter-terrorist financing (CTF) requirements. The regulations also prohibited the sale of cryptocurrency derivatives to retail consumers.
There also have been multiple laws that are targeted towards regulating advertisements. If the requirements on ads are not met, crypto executives could end up in jail for up to 2 years. As with any emerging technology, the regulatory situation will likely continue evolving and changing.
What are your thoughts as HSBC and multiple other UK banks ban crypto purchases with credit cards? And do you think this will help reduce customer risk? Let us know in the comments below. And if you found our content informative, share it with your family and friends.
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