Buying Bitcoin To Get Difficult: Citibank Bans Card Transactions For Cryptocurrencies

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A number of financial institutions and governmental bodies are cracking down on Bitcoin and other cryptocurrencies in a move to completely ban its trading. Digital currencies dominated the news in the past one year.

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Analysts predicted that Bitcoin will cross the $20,000 levels when it reached $18,000 in December 2017. However, the digital currency has witnessed a downward spiral with prices falling each week.

The government of India made its stand on Bitcoin trading as well as trading in other cryptocurrencies in the 2018 Union Budget. Finance minister Arun Jaitley clarified that trading in digital currencies will not be considered legal in the country. This has been the case with various governments across the world.

Last month, major banks like SBI, ICICI Bank, HDFC Bank, Axis Bank and Yes Bank suspended accounts of major Bitcoin exchanges in the country.

Following that, Citi India today banned its customers from using their cards for the purchase of cryptocurrencies.

Citi India in a message to its customers said it has banned usage of its debit and credit cards for purchase or trading of virtual currencies. “…Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies, and virtual currencies,” the message read.

The bank will take a review of the decision once the situation improves or the cryptocurrency markets evolve. The Reserve Bank of India (RBI), country’s banking ombudsman, has also flagged off certain risks associated with the use of virtual or cryptocurrencies which have lately won the confidence of a section of the global investor community.

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Many institutions have voiced their concern over the volatility of digital currencies. The decision came after a lot of global and domestic concerns about trading in Bitcoin and other cryptocurrencies. The trading happens under a central network which cannot be taxed.

Other than Citigroup, Bank of America, Lloyd Banking Group, Discover Bank and Capital One Bank has also banned their customers from purchasing cryptocurrencies.

MasterCard has classified cryptocurrency purchases as ‘cash advances’ that would attract a fee and levy interest charges.

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