Starting June 27, Barclays will prohibit cryptocurrency transactions using Barclaycard credit cards, citing risks associated with purchasing cryptocurrencies.
Barclays Cites Cryptocurrency Volatility
Effective June 27, Barclays clients will no longer be able to conduct cryptocurrency transactions using Barclaycard credit cards. The bank stated it made this decision because “there are certain risks with purchasing crypto-currencies.” This move comes as the United Kingdom (UK) regulator, the Financial Conduct Authority (FCA), contemplates aligning its crypto policies with fellow regulators.
As reported by Bitcoin.com News, the FCA has proposed lifting a ban on offering crypto exchange-traded notes (ETNs) to retail traders. This would pave the way for U.K.-based individual consumers to invest in crypto ETNs traded on approved or recognized investment exchanges. The regulator added that lifting the ban means investors will choose whether such a high-risk investment is right for them, given they could lose all their money.
However, in response to one of frequently asked questions from clients using its online platform, the financial institution suggested that the volatility of cryptocurrencies prompted the decision to block-related transactions.
“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. There’s also no protection for crypto assets if something goes wrong with a purchase, as they’re not covered by the Financial Ombudsman Service and Financial Services Compensation Scheme,” the bank explained.
As one of the U.K.’s preeminent financial institutions, Barclays’ decision represents a stark divergence from the more liberalizing reforms the FCA is actively pursuing. This move not only underscores a deeply ingrained conservatism within British banking but also positions them distinctly apart from the more progressive stances adopted by financial powerhouses in major global centers such as Hong Kong and the U.S.
Since Donald Trump’s return to the U.S. presidency, the nation has witnessed a pronounced shift towards dismantling regulations perceived as stifling to the burgeoning crypto industry. Concurrently, the U.S. is actively advancing landmark stablecoin legislation, while key regulators like the Securities and Exchange Commission (SEC) have notably paused their enforcement actions against cryptocurrency companies, signaling a more accommodating stance.
Similarly, Hong Kong has taken steps seen as promoting the digital asset industry and cryptocurrencies. The FCA, for its part, said lifting the ban on offering crypto ETNs demonstrates its commitment to supporting the growth and competitiveness of the U.K.’s crypto industry.
Source: Bitcoin
