A global trend in which banks are banning customers from purchasing cryptocurrencies using credit cards is on the rise, and Canada’s second largest bank just joined in. According to local news outlet The Globe and Mail, the Toronto-Dominion Bank (TD) recently announced the move in a statement emailed to its customers.
TD is notably the first major Canadian bank to enact such a policy. The move comes after several major banks throughout the world, including Bank of America, JP Morgan Chase, and Citigroup in the US, and Lloyds Banking Group in the UK, started the trend. Customers in South Africa, Australia, and India face the same ban.
In an emailed statement, a TD representative implied that the bank is halting cryptocurrency purchases with credit cards as a security measure. His email read:
“At TD, we regularly evaluate our policies and security measures, in order to serve and protect our customers, as well as the bank."
The Globe and Mail dug a little deeper, and found that other Canadian banks considered making a similar move, but haven’t yet done so. The Royal Bank of Canada (RBC), the country’s largest bank, revealed that it currently allows cryptocurrency purchases with credit and debit cards, in limited circumstances.
The bank, however, cautions its client against the use of cryptocurrencies, by warning them about the possibility of a sudden drop in their value. This, the bank claims, could “expose them to substantially higher debt levels than they are able to repay.”
In an email to the local news outlet, an RBC spokesperson wrote:
"We understand that regulatory and risk factors related to cryptocurrency continue to evolve and as a result, we are closely reviewing our policies with respect to cryptocurrency transactions."
The Bank of Nova Scotia, the country’s third largest bank, also revealed it was analyzing a potential ban on cryptocurrency purchases with credit cards. In an emailed statement, a spokesperson for the bank revealed that the organization understands that “regulatory and risk factors related to cryptocurrency continue to evolve,” and as such it’s reviewing its policies.
Other Canadian banks didn’t comment whether they were considering halting cryptocurrency investments with credit cards. TD’s move comes shortly after the Bank of America, the second largest bank in the US, admits cryptocurrencies are a risk to its business in its annual filing with the Securities and Exchange Commission (SEC).