Barclays, one of the United Kingdom’s banking giants, is set to halt crypto purchases via its credit cards starting June 27. The bank announced this decision on its website, citing the precarious nature of cryptocurrency investments and potential risks for customers. This move aligns with a growing trend among financial institutions wary of the volatile crypto market.
The Crypto Purchase Freeze
In a statement made public on Wednesday, Barclays detailed its rationale. “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 statement reads. The bank also highlighted the lack of safety nets for crypto transactions, pointing out that the Financial Ombudsman Service and the Financial Services Compensation Scheme (FSCS) provide no cover for such investments. For context, the FSCS typically protects consumers by reimbursing up to £85,000 ($116,000) if a covered institution collapses.
This move by Barclays isn’t entirely surprising, as it mirrors actions taken by other major UK banks like Nationwide and HSBC, which implemented similar bans in March 2023. Back then, the crypto sphere was still reeling from the aftermath of several high-profile collapses in 2022, prompting banks to safeguard both their customers and themselves from potential fallout. This cautious approach is echoed in other regions, as seen in Washington City’s ban on Bitcoin ATMs amid rising crypto scams.
The Broader Impact on the Crypto Market
The timing of Barclays’ decision raises eyebrows. Although the bank refrained from commenting further when approached by CoinDesk, industry analysts speculate that Barclays’ move may be influenced by a broader reassessment of risk management strategies in the financial sector. According to financial analyst Linda McMahon, “This could be an attempt by Barclays to preemptively mitigate risks associated with crypto’s notorious volatility. They’re likely trying to avoid scenarios where customers fall into insurmountable debt.”
Yet, the ban may have ripple effects beyond Barclays’ immediate clientele. Crypto enthusiasts and traders could see this as a signal that traditional financial systems remain skeptical of digital currencies’ stability. Matt Thompson, a blockchain consultant, remarks, “It’s a reminder that while crypto is gaining mainstream traction, it’s still viewed through a lens of caution by traditional banks.” This sentiment is similarly reflected in Norway, where plans to ban new crypto mining operations target popular cryptocurrencies like Bitcoin and Dogecoin.
Historical Context and Future Implications
It’s worth noting that the financial sector’s skepticism towards crypto isn’t new. The 2022 crypto market turbulence, marked by multiple firm failures, sent shockwaves through the industry. These events have seemingly left a lasting impression on banks, prompting them to adopt more conservative approaches to crypto transactions.
Looking forward, it’s uncertain whether Barclays’ decision will influence other banks to follow suit or if it will encourage crypto platforms to innovate alternative payment solutions. What remains clear, however, is that the relationship between traditional banking and cryptocurrency continues to evolve. As this dynamic unfolds, questions linger: Will the crypto market stabilize enough to reassure hesitant banks? Or will further regulatory measures tighten the grip on crypto transactions?
In the coming months, how Barclays’ decision impacts its customers and the broader crypto community will be closely watched. While some see this as a necessary precaution, others argue it’s a step back in the journey toward financial innovation. Either way, Barclays has set the stage for yet another chapter in the ongoing dialogue between the old guard of finance and the new wave of digital currency.
Source
This article is based on: Barclays to Ban Credit-Card Crypto Purchases Starting Friday
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
