- HSBC declared its clients will no longer be able to use their credit cards to buy crypto.
- This is due to the potential danger to clients, HSBC stated.
This week, two major UK banks—Nationwide Building Society and HSBC Holdings Plc—tightened restrictions on retail clients’ access to cryptocurrency assets in the wake of recent scandals and regulatory cautions in the sector.
The building society advised its clients on Wednesday. That the daily limit for using a debit card to acquire cryptocurrency assets is £5,000 ($5,965). While the usage of credit cards to do so has been discontinued. As of last month, HSBC declared its clients will no longer be able to use their credit cards to buy cryptocurrency.
Increased Regulatory Warnings
This is due to the potential danger to clients, HSBC stated. Both institutions cited the Financial Conduct Authority’s (FCA’s) long-standing warnings that crypto is a very risky investment.
These financial institutions join others in the UK. Such as Banco Santander SA, Lloyds Banking Group Plc, and Natwest Group Plc, in imposing restrictions on their clients’ use of cryptocurrencies. The majority of the top financial institutions have also enacted exchange-specific limitations. With Binance Holdings Ltd., the largest cryptocurrency platform in the world, being the most common target.
With the November incident of the cryptocurrency exchange FTX, more warnings about the risks of cryptocurrency emerged. Banks have been warned repeatedly not to expose the conventional financial system. To the dangers posed by crypto assets by international organizations including the Financial Stability Board, the International Monetary Fund, and the Financial Action Task Force.
The cryptocurrency-friendly bank Silvergate Capital Corp. hit a new low on Thursday after announcing it was evaluating its future viability. The Federal Reserve and other regulators have warned banks to be mindful of possible elevated liquidity concerns. Posed by crypto-related firms as a source of financing.
