BMO Financial Group (Bank of Montreal) has blocked cryptocurrency transactions using its BMO Mastercard credit and debit cards as well as Interac Online Payment services, a BMO bulletin published on Reddit shows.
The bulletin stated, "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."
This block applies to transactions processed using BMO MasterCard credit cards (including Small Business credit cards), BMO Debit Card-Upgraded (Debit MasterCard), and BMO Debit Cards (using Interac Online Payment).
For Interac Online Payments for a cryptocurrency transaction, BMO will debit the client's account temporarily, but will be automatically credited back within about 30 minutes. Here also the transaction will be blocked and the client will be presented with an Interac message advising them that transaction cannot be completed.
Banks generally allow clients to buy and sell cryptocurrencies such as Bitcoin, through an online crypto exchange by setting up an account through a crypto merchant website. These merchants accept different methods of payments.
Two of the largest payment processors VISA and Mastercard have also made it more difficult to buy cryptocurrencies after they started charging additional 5 percent fees for instant purchase of cryptocurrencies using debit or credit cards.
Card companies and banks are worried that their clients may end up in huge debts by buying cryptocurrencies, prices of which are highly volatile, and find it difficult to repay.
However, Mastercard reportedly said recently that it is open to the idea of using national digital currencies issued by central banks which will be less volatile.
Canada's largest bank Toronto-Dominion Bank (TD Bank) had banned the use of its credit cards to buy cryptocurrencies in late February.
Meanwhile, Royal Bank of Canada (RBC), Canada's second-largest bank by assets, has said in an email statement, "It does allow its credit and debit cards to be used for transactions involving cryptocurrency in limited circumstances."
Canada's third-largest bank Bank of Nova Scotia (Scotiabank) also is closely monitoring its cryptocurrency transaction policy.
Among Canada's "Big Five," Canadian Imperial Bank of Commerce (CIBC) is yet to reveal their stance on cryptocurrencies.
In early February, leading banks and financial firms in the US and the UK such as the Bank of America, Citigroup, JP Morgan Chase, Capital One, Discover, Virgin Money, and the Lloyds Bank had banned their customers from purchasing cryptocurrencies using credit cards. The ban, however, did not apply to debit cards.
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