Barclays to Block Cryptocurrency Transactions via Credit Cards
Starting this Friday, Barclays, a leading UK-based bank, will ban cryptocurrency transactions made through its Barclaycard credit cards. The bank cites concerns over cryptocurrency volatility and lack of investor protections. Customers risk accumulating unaffordable debt if crypto asset prices drop suddenly. These purchases also lack coverage from the Financial Ombudsman Service or Financial Services Compensation Scheme.
Understanding Barclays’ Decision
This move aligns with ongoing UK discussions about stricter controls on credit card crypto purchases. Barclays aims to protect consumers from potential financial risks associated with digital assets’ price fluctuations.
Industry Response to Restrictions
The Payments Association opposes treating crypto transactions like gambling. It argues consumers should make informed decisions within their credit limits rather than face blanket bans. The group responded to the Financial Conduct Authority’s (FCA) proposal for restrictions.
What This Means for Crypto Users
While limiting some purchase options, Barclays’ policy highlights important considerations. Credit card crypto transactions may be processed as cash advances, incurring higher fees and interest rates. Users should understand these financial implications before proceeding.
