A growing number of big U.S. credit-card issuers are deciding they don’t want to finance a falling knife.
JPMorgan Chase & Co. and Bank of America Corp., the nation’s two largest banks, said they’re halting purchases of Bitcoin and other cryptocurrencies on their credit cards. JPMorgan, enacting the ban Saturday, doesn’t want the credit risk associated with the transactions, said Mary Jane Rogers, a spokeswoman for the firm.
Bank of America began declining credit card transactions with known crypto exchanges on Friday. The policy applies to all personal and business credit cards issued by the bank, it said in a memo. The move doesn’t affect debit cards, according to Betty Riess, a spokeswoman for the Charlotte, North Carolina-based lender.
Allowing purchases of cryptocurrencies can create big headaches for card lenders, which can be left on the hook if a borrower bets wrong and can’t repay. There’s also the risk that thieves will abuse cards that were purloined or based on stolen identities, turning them into crypto hoards. Banks also are required by regulators to monitor customer transactions for signs of money laundering -- which isn’t as easy once dollars are converted into digital coins.