Chase U.K. restricts crypto purchases despite JPMorgan's blockchain push
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(Kitco News) - United Kingdom-based customers of Chase Bank, a subsidiary of financial services company JPMorgan Chase, have been informed that starting on October 16, they will no longer be able to make crypto transactions using their debit cards or through outgoing bank transfers.
According to a note sent to Chase Bank customers on Tuesday, if the bank thinks a customer is making a payment related to crypto assets, they will decline it.
“To help keep your money safe from fraud and scams, we’re changing the types of payments you can make from Chase,” the note said. “From 16 October 2023, if we think you’re making a payment related to crypto assets, we’ll decline it. If you’d still like to invest in crypto assets you can try using a different bank or provider instead.”
Chase said it made this decision “because fraudsters are increasingly using crypto assets to steal large sums of money from people. Declining these payments is one of the ways we’re helping keep you and your money safe.”
A representative of Chase reiterated that the bank has elected to enforce the new restrictions due to an “increase in fraud and scams” related to crypto assets, and pointed to data from Action Fraud, Britain’s fraud reporting agency, which shows that U.K. consumer losses to crypto fraud have spiked more than 40% year-over-year as of May.
So far in 2023, the losses in the U.K. have surpassed 300 million British pounds ($365 million).
“Customers will receive a declined transaction notification if they do attempt to make a crypto-related transaction,” the bank said in a statement.
“This has been done to protect our customers and keep their money safe,” the Chase spokesperson said. “We’re committed to helping keep our customers’ money safe and secure. We’ve seen an increase in the number of crypto scams targeting U.K. consumers, so we have taken the decision to prevent the purchase of crypto assets on a Chase debit card or by transferring money to a crypto site from a Chase account.”
It remains to be seen how the U.K. government will respond to this change of service as cryptocurrencies are legal in the country and there is no law or government policy that bans making such payments.
Chase Bank currently has more than 4,600 branches around the world serving more than 50 million active users. In September 2022, their U.K. user base reached 1 million individuals, which represents 2% of the bank’s total users worldwide.
|JPMorgan to launch a crypto innovation lab in Athens|
While Chase is looking to restrict customers' access to purchasing crypto, JPMorgan is actively involved in the development and implementation of blockchain technology and is reportedly in the early stages of exploring the creation of a blockchain-based digital deposit token designed to speed up cross-border payments and settlement.
According to a source familiar with the matter who asked not to be identified, the largest bank in the U.S. by assets has already developed most of the underlying infrastructure needed for the new payment vehicle to work but is waiting on final approval from U.S. regulators before they actually create the token. Once approval is received, JPMorgan will likely launch the product for use by corporate clients within a year.
In June, the bank introduced euro-denominated payments for corporate clients using its native, blockchain-powered digital currency, JPM Coin, with Germany’s Siemens AG conducting the first euro payment on the platform.
JPM Coin, which originally launched in 2019, is now part of JPMorgan’s blockchain-based Onyx Coin Systems, which was launched in 2020. The purpose of the system is to improve the quality of wholesale payment transactions. As of April 2023, the bank has reportedly processed nearly $700 billion in short-term loan transactions via Onyx.
That same month, JPMorgan partnered with six major Indian banks to launch a pilot program designed to test a blockchain-based platform for the settlement of interbank dollar transactions. The goal of the project is to expand the capacity of the existing settlement system and allow the banks to process instant transactions 24 hours a day, seven days a week.