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- Barclays will stop allowing crypto purchases via credit cards starting June 27.
- The bank cites high volatility and financial risk to consumers.
- The move contrasts with UK regulators’ push to ease crypto access.
Starting June 27, Barclays customers will no longer use their Barclaycard credit cards to buy cryptocurrency. The bank confirmed this change on its online platform. It explained the decision stems from concerns about crypto’s price swings and the lack of consumer protection. The bank noted that people could fall into unmanageable debt if crypto prices crash after they make credit-based purchases.
Unlike traditional financial assets, Crypto does not meet insurance or protection in accordance with the UK’s Financial Ombudsman Service or Financial Services Compensation Scheme. Consumers can neither protect nor compensate for any insurance against Crypto, exposing them to a complete loss without a refund. This move puts Barclays in line with other traditional banks, which prefer to maintain a protective position for digital assets.
UK Bank Moves Against FCA’s Direction
Barclays’ decision comes when the Financial Conduct Authority (FCA) in the UK is thinking of changing policies. The regulator has proposed to stop the ban on crypto exchange-traded notes (ETNs) for retail investors. These products would allow people to access the crypto market through regulated investment platforms.
The FCA said that retail investors should have the freedom to decide whether they want to bear such risks or not. Once this proposal is accepted, it may lead to more individual investors coming forward for UK crypto regulation.
This will be equivalent to other markets in the UK, where such products are already available to consumers. However, Barclays seems to take the opposite path. While FCA aims to facilitate vigorous crypto investment, the bank is using a vital role to use it for users.
Global Crypto Support Grows, UK Hesitates
The movement of Barclays also distinguishes the UK from other areas where the cryptocurrency strategy becomes more favorable. In the USA, the regulatory pressure has been relaxed for cryptocurrency companies. Since Donald Trump has returned to office, regulators have stopped many activities against cryptocurrency companies.
New invoice regarding Stablecoins is also progressing. Meanwhile, Hong Kong has promoted crypto-friendly laws. The city is working to make it a center for digital resources in Asia. These developments indicate that other major markets are moving towards welcoming the sector.
Despite this, Barclays has elected to restrict customer access. This decision, even when the regulator wants to modernize the UK’s crypto rules, shows caution in the UK banking sector. This step may reduce cryptocurrency for common consumers, although UK legislation is more liberal.
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