Barclays, a leading UK bank, has decided to prohibit its customers from using credit cards for buying cryptocurrencies, effective from the end of this week. The ban on crypto transactions using Barclaycard-branded payment cards is set to come into effect on June 27, as stated on the company's website. The primary reason behind this move is the potential risks involved in crypto purchases, which could lead to customers accumulating debt they cannot afford to repay.
Additionally, crypto assets lack protection in case of a faulty purchase, as they are not covered by the Financial Ombudsman Service or the Financial Services Compensation Scheme. This scheme typically reimburses customers up to £85,000 if an insured institution fails.
Although this move is not unprecedented, with rival banks like Nationwide and HSBC having implemented similar restrictions in March 2023, the exact reason behind Barclays' decision to impose this ban now remains unclear. The bank has declined to provide further comments on this matter.