Barclays to Block Credit Card Crypto Purchases Citing Risk

Barclays (LSE: BARC), one of the UK’s largest banks, announced it will block cryptocurrency purchases made with its Barclaycard credit cards starting June 27. The decision follows concerns over financial risk and lack of regulatory protection tied to digital asset transactions.

According to a notice published on the bank’s website, the move is meant to safeguard customers from potentially unmanageable debt linked to the volatility of crypto markets. "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," the notice states.

Barclays emphasized that crypto assets are not protected by the Financial Ombudsman Service or the Financial Services Compensation Scheme (FSCS), which covers up to £85,000 ($116,000) per customer in the event of a financial institution’s failure.

Although several UK banks, including Nationwide and HSBC, imposed similar credit card restrictions in early 2023 amid the aftermath of major crypto firm collapses, Barclays’ timing has raised questions. The bank did not provide further explanation when asked by CoinDesk.

The announcement highlights ongoing tension between traditional financial institutions and the crypto industry. Credit card bans aim to reduce exposure to high-risk investments that lack consumer safeguards, but they also underscore broader regulatory uncertainty around digital currencies in the UK.

As crypto adoption continues to grow, particularly among retail investors, such restrictions may influence how consumers access and interact with the digital asset market. Barclays customers can still use debit cards and bank transfers for crypto purchases where allowed.

The decision signals a cautious approach by legacy banks amid ongoing scrutiny of the crypto sector, reinforcing concerns over consumer protection and financial stability in an evolving digital economy.