As of June 27, 2023, Barclays has prohibited the use of credit cards for the purchase of cryptocurrency, joining a list of UK banks restricting access to digital assets.
Why Barclays is Introducing Crypto Purchase Restrictions
Barclays is the latest major UK bank to ban cryptocurrency purchases via credit cards. The main reasons for this decision include concerns over customer safety and the volatility of digital assets. According to the bank's statement: "With crypto prices swinging sharply and scams still a concern, the bank has decided that using borrowed money to chase volatile digital assets just doesn't make sense."
Customer Impact and Alternative Methods
Barclays customers who previously used credit cards for cryptocurrency purchases will lose that option at the end of the week. However, access to digital assets remains available: customers can continue purchasing cryptocurrency using debit cards and bank transfers with available funds. The restriction also applies to cash advances intended for cryptocurrency purchases on third-party platforms.
Industry Response and Future of Restrictions
In recent months, other major UK banks such as Santander and NatWest have also implemented similar restrictions, indicating a wider trend within the financial sector. Regulators, including the FCA, have expressed concerns about the risks associated with crypto investments, especially when involving borrowed money. As a result, further banks are expected to adopt similar measures in the coming weeks.
Barclays' credit card ban on cryptocurrency purchases highlights growing concerns within the financial sector about using borrowed money for volatile digital asset investments. This policy change aligns with regulatory guidance and industry trends, allowing customers to maintain access to cryptocurrency using existing funds.
