India’s HDFC Bank Bans Cryptocurrency Transactions Using Cards

India’s HDFC Bank has banned the transaction of cryptocurrency using its debit or credit cards.

The second largest private sector lender in India informed the decision in an e-mail sent to all its cardholders citing concerns expressed by the Reserve Bank over the risks of virtual currencies.

“You may be aware of the increasing global apprehensions regarding bitcoin, cryptocurrencies and virtual currencies. The Reserve Bank of India has also cautioned the public regarding the potential operational, economic, legal and security related risks associated in dealing with such currencies”.

The Mumbai-based bank said that to ensure its customer’s security, it has decided to “not permit usage of HDFC Bank Credit, Debit and Prepaid Cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies on merchants suspected to be dealing with cryptocurrency or online foreign exchange trading or both.”

HDFC now joins State Bank of India and Citibank India, which stopped their customers from using credit or debit cards for cryptocurrency business.

Earlier this year, banks had reportedly stopped or delayed processing deposits and withdrawals in dedicated bitcoin exchanges.

Last month, India’s Finance Minister said at his budget speech that bitcoin is not legal tender.

The ban on Cryptocurrency purchase via credit and debit cards will be a major setback for Indian cryptocurrency market.

The most popular cryptocurrency, Bitcoin, is going through a rough patch in recent days. It lost its value by 9 percent in trading Wednesday following news that Google banned cryptocurrency-related advertisements on its platform.

Bitcoin further plunged to a low of around $7,676 – its worst level in five weeks – early Thursday morning, before bouncing back up again. 

Prices of other major cryptocurrencies also saw a sharp downward trend Thursday.

by RTT Staff Writer

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