The UK’s Financial Conduct Authority (FCA) is considering a ban on the use of credit for purchasing cryptoassets.
A YouGov survey commissioned by the FCA indicates that the trend of buying crypto with credit is rising, increasing from 6% in 2022 to 14% in 2024. The FCA expresses concern that individuals engaging in this practice may be incurring unsustainable debt, especially if the value of their crypto investments declines, making repayment difficult.
While several prominent payment firms have already implemented restrictions, the FCA is proposing a comprehensive ban on the acceptance of credit cards and credit lines for crypto purchases. However, this ban is not expected to include qualifying stablecoins from FCA-authorized providers.
This proposal is part of a discussion paper released alongside recent draft legislation aimed at enhancing regulatory oversight of crypto firms in the UK. David Geale, FCA’s executive director for payments and digital finance, emphasized the necessity for a clear regulatory framework that fosters innovation while ensuring market integrity and consumer protection. He stated, “Our aim is to drive sustainable, long-term growth of crypto in the UK. We’re asking whether we have the balance right.”
Stakeholders can provide feedback on the discussion paper until June 13, with further consultation on the final regulatory framework anticipated later this year.
For more details, you can read the discussion paper available for download.