Several refugees housed at the Lynx House have reported being subjected to harassment for wearing the wristbands. The firm handling the shelter said it would stop the practice, according to an opposition lawmaker.
A refugee shelter in the Welsh capital of Cardiff has come under scrutiny in the UK for forcing asylum seekers to wear colored wristbands around the clock in order to access food.
Refugees housed by Clearsprings Ready Homes - a private firm contracted by the UK Home Office - claimed that the wristbands identified them in public, adding that they were subject to harassment on the streets for wearing them.
"If we refused to wear the wristbands, we were told we would be reported to the Home Office," Eric Ngalle, who stayed at the shelter for a month, told UK periodical The Guardian.
"I made a complaint about the wristbands to Clearsprings, but nothing was done," Ngalle added.
MP Tim Farron, leader of the UK's Liberal Democrats, said the practice was "utterly unacceptable" after referring to another controversial incident in which private security contractor G4S painted the front door of refugee shelters red.
Labour MP and shadow Justice Minister Jo Stevens said on Twitter that she spoke to Clearsprings operations director about the issue at the Lynx House, and that the firm confirmed it would cease the practice.
I am "delighted that asylum seeker wristband policy [is] being abandoned today. Still questions for government answer on this," Stevens wrote in a tweet.
The move was hailed as a victory for refugee rights in Cardiff, with Trinity Centre - a charity of the Cardiff Methodist Circuit that serves asylum seekers - saying it was only the first step to addressing wider issues.
The Refugee Council - one of the UK's leading organizations working with asylum seekers and refugees - reported that in the first three-quarters of 2015, the UK received some 22,000 asylum applications, a figure significantly lower than its European neighbors Germany and Sweden.
The council added that the government rejected around 60 percent of the requests for asylum.