CBA cancels credit card spending on crypto currencies

CBA cancels credit card spending on crypto currencies

Fail to meet a minimum standard of regulation and reputation, says bank facing action for breaching money laundering laws

Commonwealth Bank of Australia customers are no longer able to use their credit cards to buy virtual currencies, after the bank put a halt to the practice.

CBA – which last week said it had provisioned $375 million to pay off fines it expects to receive from AUSTRAC for breaches of the Anti-Money Laundering and Counter-Terrorism Financing Act – said the move was due to the “unregulated and highly volatile nature of virtual currencies”.

The restriction on credit card usage for virtual currencies will also apply to Bankwest credit cards. It does not yet apply to transaction accounts, or debit cards.

“Virtual currencies have yet to meet a minimum standard of regulation, reliability, and reputation,” the bank, which is preparing itself to face a Royal Commission into misconduct in financial services, said in a statement.

“We have made this decision because we believe virtual currencies do not meet minimum standard of regulation, reliability, and reputation when compared to currencies that we offer to our customers. Given the dynamic, volatile nature of virtual currency markets, this position is regularly reviewed,” the bank added.

The bank also suggested its security systems had blocked payments to virtual currency exchange made with debit cards.

“A currency exchange will be blocked if a number of the transactions it has previously processed are found to have been fraudulent, inconsistent with our policies or outside of the Group’s risk tolerance,” CBA said in an explainer around the changes.

The move follows similar ones made by banks in the US and UK made in recent weeks.

Last week Lloyds Banking Group, Bank of America, JP Morgan Chase and Citigroup were among those that announced a similar ban of credit card payments for cryptocurrencies. 

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Tags financemoneycreditCBACommonwealth Bank of AustraliaBitcoinPaymentscashcryptocurrencydogecoincryptocurrenciesciocoin

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