TD, BMO block customers from purchasing cryptocurrencies on credit cards
According to The Canadian Press, Bank of Montreal (BMO) has become the second leading Canadian bank to ban its customers from purchasing cryptocurrencies like Bitcoin on their credit cards, following a similar announcement from Toronto Dominion (TD) Bank last month.
The bank stated that the decision was made following an evaluation of cryptocurrencies as part of its regular security measures. Within this, cryptocurrencies were deemed to be a volatile market that could expose customers to substantially higher levels of debt than they are able to pay as a result of potential sudden drops in value.
The move comes in the wake of a significant decline in the price of Bitcoin throughout 2018, having dropped from its all time high price of almost USD$20,000 to its current price of just over $8,000.
The fall in price has also come with renewed skepticism, with the Head of Global Economics & Strategy at Allianz Global Investors, Stefan Hofrichter, having claimed that Bitcoin “has no intrinsic value”.
“From our perspective, bitcoin has serious flaws: its trajectory resembles a textbook case of a financial-market bubble, and it is lacking several key qualities that would qualify it as a currency,” said Hofrichter.
The move from both TD and BMO follows moves made by several US banks to stop allowing cryptocurrency purchases on their own customer’s credit cards.