Britain's biggest bank has become the first to announce a ban on customers using credit cards to buy Bitcoin amid fears they could run up huge losses.

Lloyds Banking Group will on Monday tell its 9 million credit card customers that it will block any attempts to buy Bitcoin after the digital currency lost more than half its value in just two months.

The price of Bitcoin has fallen by 57 per cent from £14,000 in December to less than £6,000 and the bank fears it could end up footing the bill for unpaid debt should the price fall any lower.

It is believed that hundreds of thousands of British people invested in the cryptocurrency last year amid its extraordinary 13-fold increase.

But from Monday credit card customers of Lloyds, which includes Halifax, Bank of Scotland and MBNA, will be blocked from buying the cryptocurrency online via a blacklist which will flag up sellers. While Lloyds is the first, it is thought that other banks will shortly follow suit.