Barclays Bans Crypto Transactions on Cards Due to Volatility Risks

Barclays, a prominent UK-based financial institution, has announced a comprehensive ban on cryptocurrency transactions made through its bank cards, effective from June 27, 2025. This decision is driven by the bank's growing concerns over the volatility and uninsured status of crypto assets, which present significant risks for their clients. Barclays warns that sudden drops in the value of crypto assets could lead customers to incur debts that are difficult to manage.

The new directive will disallow any cryptocurrency purchases or sales using Barclays bank cards. This decision is based on the financial dangers of substantial losses from which clients might struggle to recover. Unlike traditional financial securities, crypto investments lack legal safeguards, making them considerably riskier. Clients investing in cryptocurrency may find themselves without the protection usually afforded by institutions like the UK Financial Ombudsman Service or the Financial Services Compensation Scheme. This regulatory void significantly heightens the risk to customers, prompting Barclays’ preventative approach.

Barclays’ official statement emphasizes the risks associated with purchasing cryptocurrencies, stating that it is taking this step to protect its customers from potential financial losses. The bank further elaborated that a fall in the price of crypto assets could lead to customers finding themselves in debt they can’t afford to repay, and there is no protection for crypto assets if something goes wrong with a purchase.

Despite the prohibition, Barclays appears to maintain ties with the crypto industry. Previous reports reveal substantial investment in the IBIT Bitcoin exchange-traded fund, operated by BlackRock. Barclays’ involvement reportedly includes 2,473,064 shares valued at around $137 million, supposedly maintained for private clients. Although direct card-based crypto transactions are banned, Barclays’ clients might still engage in the market via other financial products. Historical patterns have shown banks like those in Turkey and the UK occasionally reversing similar bans in response to market conditions and evolving regulations.

Barclays’ decision stems from the desire to enhance client protection and ensure compliance with regulations amid the complex landscape of digital assets. As the cryptocurrency market continues to grow, the impact of such institutional policies aimed at risk mitigation will unfold. While its direct involvement in customer crypto transactions has ceased, Barclays’ indirect presence indicates a nuanced approach. By balancing risk management with investment opportunities, Barclays navigates the intricacies of the evolving cryptocurrency sector.