Barclays bank has announced it will block customers from using Barclaycard credit cards to buy crypto starting June 27
According to Barclays, the decision stems from concerns over consumer protection and repayment risks. The bank warned that crypto price volatility could expose users to debts they may be unable to manage.
The bank also pointed out that digital assets do not fall under UK financial safeguards, and affected customers would have limited recourse if a transaction goes wrong.
It explained:
“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. There’s also no protection for crypto assets if something goes wrong with a purchase, as they’re not covered by the Financial Ombudsman Service and Financial Services Compensation Scheme.”
The regulator has highlighted the risks associated with leveraging credit to invest in high-volatility assets, particularly for inexperienced retail investors.
Meanwhile, the contrast between limiting customer access and expanding its crypto holdings points to an emerging divide in how traditional financial institutions approach the crypto sector.
While the new policy may protect users from risky borrowing practices, it could also encourage investors to use non-traditional platforms.
Considering this, industry analysts predict a growing demand for alternative on-ramps, such as fintech applications and decentralized services that bypass conventional banking systems.
