Citi India bans use of debit/credit cards to buy bitcoins

Citi India today banned use of its debit and credit cards for purchase of bitcoins and other cryptocurrencies following concerns expressed by the Reserve Bank over virtual currencies.

Citi India in a message to its customers said it has banned usage of its debit and credit cards for purchase or trading of 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 message read.

In his Budget Speech, Finance Minister Arun Jaitley had said the government does not consider cryptocurrencies legal tender or coin and will take all measures to eliminate use of these crypto-assets in financing illegitimate activities or as part of the payment system.

The decision, the bank said, comes following concerns, both globally and locally including from the RBI, cautioning the public regarding the potential economic, financial, operational, legal, customer protection and security related risks associated in dealing with bitcoins, cryptocurrencies and virtual currencies.

Virtual currencies are stored in digital/electronic format, making them vulnerable to hacking, loss of password and malware attack which may also result in permanent loss of money.

The RBI has also clarified that it has not given any licence/authorisation to any entity/company to operate such schemes or deal with bitcoin or any virtual currency.