UK Authority Suggests Barring Credit Card Purchases of Cryptocurrencies
Crypto Buying with Credit Could Soon Be Banned in UK
You heard that right, folks! The UK's Financial Conduct Authority (FCA) is proposing a ban on using credit to purchase cryptocurrencies. Yikes!
In their latest discussion paper, the FCA is proposing to outlaw crypto firms from allowing British customers to buy crypto assets with a credit card. This proposed ban also extends to any other form of credit, such as loans or digital currency credit lines.
The reason behind this move? The FCA is worried that UK adults are going deeper into debt to invest in crypto, a risky, volatile venture. According to a recent YouGov survey commissioned by the Authority, 14% of UK crypto users admitted to using credit to buy digital assets in August 2024, a massive 133% increase compared to two years ago.
Don't worry, though, not all crypto assets would be affected if this rule passes. FCA-regulated stablecoins may be exempt from the ban, depending on the final rules.
The FCA has now opened up the rulemaking to public comment and will accept feedback on the proposal until June 13. Keep those opinions coming!
This proposal is part of a larger plan by the FCA to regulate the crypto market. They're also working on a rule that would make crypto staking firms liable for financial losses suffered by retail consumers, and a ban on all crypto lending and borrowing platforms.
So, what do you think about this? Will this ban help prevent people from going into debt or will it stifle the crypto market? Let us know in the comments!
Edited by Andrew Hayward
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- The Financial Conduct Authority (FCA) has suggested a prohibition on crypto firms providing British clients with credit to purchase cryptocurrencies, including Bitcoin.
- The decision also applies to other types of credit, such as loans and digital currency credit lines.
- The FCA's concern stems from the increasing number of UK adults using credit to invest in cryptocurrency, a risky, volatile venture.
- A recent YouGov survey revealed a 133% increase in UK crypto users purchasing digital assets with credit, compared to two years ago.
- While the proposed ban affects most crypto assets, FCA-regulated stablecoins may be exempt, subject to final rule assessments.
- The FCA is inviting public comment on the proposal, accepting feedback until June 13.
- The ban is part of the FCA's broader initiative to regulate the crypto ecosystem and address potential dependencies on credit for crypto investing.
- The FCA is also considering measures like making crypto staking firms liable for financial losses suffered by retail consumers and banning all crypto lending and borrowing platforms.
- As the regulatory landscape for cryptocurrency evolves, it's likely that personal-finance decisions, retail businesses, and the finance industry will be significantly affected.
