- Barclays bans crypto buys via credit cards starting June 27 due to rising debt concerns.
- Crypto assets lack UK protection schemes prompting Barclays to block card-based purchases.
- Barclays holds $131M in BlackRock’s Bitcoin ETF while restricting retail crypto transactions.
Barclays, one of the largest banks in the United Kingdom, will ban its customers from buying cryptocurrencies using their credit cards starting June 27. The decision, which was disclosed on the bank’s official site, adds Barclays to several major lenders that have recently imposed similar restrictions. The bank cited the risks of unmanageable debt and the absence of consumer protections as its primary reasons for the policy shift.
Barclays Implements Ban on Crypto Purchases With Credit Cards
Barclays has taken decisive action to stop credit card transactions related to cryptocurrencies. Starting June 27, customers will no longer be able to use Barclaycard-branded credit cards to buy digital assets on exchanges or trading platforms. The bank’s notice explains that sharp fluctuations in cryptocurrency prices could leave users in debt they cannot afford to repay.
This decision comes at a time when other major U.K. lenders, including Nationwide and HSBC, have implemented comparable restrictions. The Bank highlighted that crypto assets do not qualify for protection under the Financial Ombudsman Service or the Financial Services Compensation Scheme.
These programs safeguard customer funds if a bank or financial institution fails, but they do not extend coverage to crypto-related losses. In its notice, Barclays pointed out the risk that customers could face significant financial harm if something goes wrong with a crypto transaction.
Although banks in the U.K. have previously blocked certain crypto purchases, Barclays’ move draws particular attention because the bank holds shares in BlackRock’s iShares Bitcoin Trust (IBIT).
In its latest SEC 13F filing, Barclays disclosed an investment valued at $131 million in BlackRock’s Bitcoin ETF. This highlights a distinction between institutional investment activities and consumer protection standards applied to retail customers.
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Major U.K. Lenders Move to Limit Retail Crypto Exposure
Barclays is not the only one that took such a cautious approach. Other U.K.-based financial institutions, including Lloyds, Virgin Money, JPMorgan and Citigroup, were also reported to have made efforts to block or restrict crypto transactions funded by credit cards. Several banks claim that an increase in fraud and scam reports related to crypto trades is one of the key factors that have resulted in stricter regulations.
The trend began to accelerate in 2023, shortly after high-profile failures in the crypto industry left customers facing substantial losses. Payment systems are also exploring methods to provide crypto-based services, with Mastercard recently joining with Chainlink to enable fiat-to-token onchain swaps.
Nonetheless, banks are cautious about the exposure of retail customers to volatile assets, especially where credit is involved. Barclays announced that it will continue to review its approach by country and monitor risks associated with digital assets.
Also Read: Spanish Bank BBVA Advises Up to 7% Bitcoin Portfolio for Wealthy Clients