BMO Financial Group (Bank of Montreal) has banned credit and debit card customers from buying cryptocurrencies, another blow for the crypto-traders who recently saw a sizable number of banks deciding not to finance the wobbly asset class.
Bank of Montreal started declining cryptocurrency transactions with known exchanges on March 28, according to a bulletin published on Reddit by a user claiming to be working for the bank.
The policy applies to all personal and business credit cards, according to a memo. It also affects debit cards and online banking services through the BMO’s Interac Online Payments.
The leaked memo states: “effective immediately, BMO will be blocking cryptocurrency merchant transactions. This decision was made due to the volatile nature of cryptocurrencies and to better protect the security of our clients and the bank.”
What Does 2021 Hold for the Markets? HYCM CEO SpeaksGo to article >>
BMO’s decision follows several of the biggest Canadian banks banning cryptocurrency transaction over the past few months, as part of a global crackdown led by major lenders and credit card issuers. Canada’s largest bank Toronto-Dominion Bank (TD Bank) has blocked attempts to buy digital currencies last month.
Royal Bank of Canada (RBC), Canada’s second-largest bank by assets, didn’t cut off card purchases but said it would allow transactions involving cryptocurrency only “in limited circumstances.”
While BMO is not the first, but the action exacerbates pressures and make it more difficult for enthusiasts to buy into the market as more other banks could shortly follow suit.
The banks fear that allowing purchases of cryptocurrencies using money borrowed on credit cards could leave them on the hook if the buyers’ bets were wrong and couldn’t repay their debts.