Barclays is limiting cryptocurrency purchases made with credit cards for retail customers in the UK, citing concerns over the risks associated with buying digital assets.

From Friday 27 June, customers will no longer be able to use a Barclaycard for cryptocurrency transactions. "We recognise there are certain risks with purchasing cryptocurrencies," Barclays stated.

The bank explained its decision, saying, "We’re doing this because a fall in the price of crypto assets could lead to customers facing unaffordable debt."

Barclays also highlighted the lack of consumer protections for cryptocurrency purchases. Unlike traditional financial transactions, crypto purchases are not covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme, leaving buyers vulnerable if issues arise.

In its statement, Barclays directed customers to the Financial Conduct Authority’s (FCA) website for further information, advising them to search for "crypto the basics".

The FCA’s webpage reiterates these concerns, stating, "It’s important to remember that crypto is largely unregulated in the UK, so it is highly unlikely you will be covered by the Financial Services Compensation Scheme. You should not expect any kind of compensation to cover crypto related losses."

Barclays’ decision follows similar moves by HSBC and Nationwide in 2023, which also restricted cryptocurrency purchases using credit cards for UK retail customers. Both banks cited consumer protection concerns and regulatory pressures.

HSBC referenced warnings from the FCA, which classifies cryptocurrencies as high-risk and speculative investments. Nationwide went further, banning credit card payments to cryptocurrency exchanges entirely and imposing a daily debit card limit of £5,000 for crypto transactions.

---