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MUMBAI: Close on the heels of Indian private banks shutting down accounts of bitcoin exchanges, Citi has barred the use of its debit or credit cards for purchase of bitcoins or any such cryptocurrency. Citi is the only multinational bank among the top five card issuers in the country.

“Given concerns, both globally and locally, including from the Reserve Bank of India, cautioning members of the public regarding the potential economic, financial, operational, legal, customer protection and security-related risks associated in dealing with bitcoins, cryptocurrencies and virtual currencies, Citi India has decided to not permit usage of its credit and debit cards towards purchase or trading of such bitcoins, cryptocurrencies and virtual currencies,” the bank said in a communication to all cardholders on Tuesday.

According to reports, JPMorgan Chase, Bank of America and Citi had globally decided to disallow use of their credit cards for purchase of bitcoins. In India, Citi has decided to disallow the use of debit cards too. Although JPMorgan and Bank of America have a presence in India, they are not into retail banking and do not issue cards here.

While the payment companies Visa and Mastercard have not blocked cryptocurrency payments, they continue to maintain a cautious approach. A Visa spokesperson said, “Visa allows credit, debit and certain prepaid Visa products to be used to purchase cryptocurrency, provided such transactions are legal in both the buyer’s and seller’s jurisdictions. Issuers make authorisation decisions and apply their own risk policies when evaluating each authorisation request.”

Earlier banks had said purchase of cryptocurrency fell in a grey area. While Indians are allowed to make cross-border purchases, these are restricted for forex trading or for speculation. A Mastercard India spokesperson said the company has not disallowed bitcoin purchases but there has been a modification in the transaction modality. According to reports, Mastercard has decided to classify customers’ cryptocurrency purchases as ‘cash advances’, which attract an immediate fee and interest charges and, unlike purchase of goods, there is no interest-free period.

