Barclays Bank, headquartered in the UK, will prohibit cryptocurrency transactions made through its Barclaycard credit cards starting Friday (June 27), citing risks associated with the volatility of cryptocurrencies.
According to the bank's website, this decision is based on concerns over the volatile prices of tokens and the lack of regulatory protection for investors. Barclays stated, "We are doing this because the decline in crypto asset prices could lead customers into unmanageable debt." It added:
A Barclays spokesperson declined to comment further on this decision.
Since at least 2018, Barclays has allowed cryptocurrency transactions via credit cards, enabling customers to purchase digital assets on cryptocurrency exchanges. In 2023, the company reported over 5 million credit card accounts in the UK.
Barclays' move to ban cryptocurrency purchases comes amid ongoing debates in the UK about whether more restrictions are needed to prevent residents from using credit cards to buy cryptocurrencies.
On May 2, the UK's Financial Conduct Authority (FCA) released a document seeking opinions on whether "restrictions should be imposed on the use of credit cards to purchase cryptocurrencies."
The Payments Association, based in London, opposed the idea of restricting cryptocurrency purchases via credit cards in response to the FCA document, arguing that such a move would unfairly equate digital assets with high-risk activities.
"Concerns have emerged regarding the proposal to ban the use of credit cards for purchasing cryptocurrencies. This suggestion seems to equate cryptocurrency purchases with gambling; instead, consumers should be empowered to make informed choices within their credit limits."
The Payments Association pointed out that there are already controls in place for purchasing high-risk assets, including cryptocurrencies, with credit cards. In some cases, banks may prevent individuals from using cash to buy digital assets, making credit cards an alternative.
However, using credit cards to purchase cryptocurrencies may incur additional costs. According to Bankrate, some issuers treat these transactions as cash advances, which could trigger higher fees and interest rates.
Related: Turkey Tightens Cryptocurrency Rules, Requires Source and Purpose Checks for Transfers
Original article: “Barclays Bank to Ban Credit Card Cryptocurrency Transactions Starting Friday”
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