Barclays Bank has announced that it will block customers to use Barclaycard credit cards to buy crypto from 27 June
The move was quietly attached in a new one Updated FAQ section On the official website of the bank.
According to Barclays, the decision stems from concern about consumer protection and repayment risks. The bank warned that crypto price volatility can expose users to debts that they may not be able to manage.
The bank also pointed out that digital assets do not fall under the British financial guarantees and affected customers would have a limited story if a transaction goes wrong.
It explained:
“We do this because a decrease in the price of crypto assets can lead to customers in the debts that they cannot afford.
This step reflects broader regulatory discussions in the UK, with the Financial Conduct Authority (FCA) who recently investigate ways to limit crypto purchases that have been made with borrowed funds.
The supervisor has emphasized the risks related to the use of credit to invest in assets with high volatility, in particular for inexperienced retail investors.
However, Barclays’ decision arrives only a few months after the bank has announced a $ 131 million interest in BlackRock’s Ishares Bitcoin Trust (IBIT). This investment places Barclays under the growing list of institutions that are exposed to spot Bitcoin ETFs in the US.
In the meantime, the contrast between limiting customer access and expanding his crypto companies on an emerging gap in how traditional financial institutions approach the crypto sector.
Although the new policy can protect users against risky loan practices, the investors can also encourage non-traditional platforms.
In view of this, industrial analysts predict a growing demand for alternative on-disasters, such as fintech applications and decentralized services that circumvent conventional banking systems.