Barclays has announced a ban on purchasing cryptocurrency using Barclaycard credit cards, citing risks associated with the financial volatility of crypto assets.
Reasons for the Crypto Transaction Ban
According to the bank's website, the decision was made due to concerns about the volatility of tokens and a lack of regulatory measures to protect investors. Barclays stated:
> "We're doing this because a fall in the price of crypto assets could lead to customers finding themselves in debt they can't afford to repay."
Additionally, the bank emphasized that there is no protection for crypto assets if something goes wrong with a purchase, as they are not covered by the Financial Ombudsman Service and Financial Services Compensation Scheme.
Banking Sector's Reaction
Until now, Barclays allowed crypto transactions via credit cards since at least 2018, enabling customers to purchase digital assets on cryptocurrency exchanges. However, the ban on crypto purchases comes amid ongoing debates in the UK on whether more restrictions are needed to protect consumers when using credit to purchase cryptocurrency.
Expert Opinions on Crypto Restrictions
The Payments Association, a London-based entity, voiced their disagreement with the FCA's proposal to ban crypto purchases using credit cards. They argue that such a move would unfairly equate cryptocurrency purchases with gambling.
> "Concerns arise regarding the proposed ban on using credit cards to purchase crypto. This suggestion seems to equate crypto purchases with gambling; instead, consumers should be empowered to make informed choices within predefined credit limits."
Barclays' decision to ban crypto transactions raises questions about the bank's future involvement in the digital asset market and sparks a discussion on the need for stricter measures to protect consumers.
