Scoop: UK Planning to Ban Credit Usage in Crypto Purchases
UK Authority Suggests Prohibiting Purchase of Cryptocurrencies Using Credit Facilities
Welcome to the latest scoop! The mighty Financial Conduct Authority (FCA) of the UK is gunning for a change in the crypto world. They're proposing a ban on using credit, whether it's credit cards, loans, or digital currency credit lines, to buy cryptocurrencies.
In a new discussion paper this week, the FCA outlined their vision to nix crypto firms' ability to allow British folks to buy digital assets with a credit card. This rule would extend to all forms of borrowed funds, aiming to discourage individuals from diving headfirst into crypto-debt quagmires.
The FCA's concern stems from the growing trend of UK citizens relying on credit for crypto purchases, a trend they say can lead to unsustainable debt, especially if the value of crypto assets tanks. A recent YouGov survey commissioned by the Authority revealed that 14% of UK crypto users reported using credit for crypto purchases in August 2024, a staggering 133% increase from two years back.
The proposed rule, if enacted, won't snuff out all crypto transactions. Stablecoins authorized by the FCA's new regulatory regime could be exempt from the ban.
The FCA has opened the floodgates for public comment on this proposal. They'll be accepting feedback until June 13, 2025, with plans for additional consultations later in the year.
This move is part of the FCA's broader effort to regulate the crypto sector, following recent draft legislation by the UK government that aims to bring crypto firms under regulatory oversight. They've also proposed other regulations for crypto staking firms and a blanket ban on all crypto lending and borrowing platforms.
Sources:
- Financial Conduct Authority's Discussion paper on the use of credit in crypto asset purchases (2025): https://www.fca.org.uk/publications/discussion-paper/dp25-02
- YouGov survey on UK crypto usage (2024): https://www.yougov.com/topics/global/cryptoassets/articles-reports/2025/01/24/uk-consumers- increasingly-using-credit-crypto
- UK government's draft legislation on crypto firm oversight (2025): https://www.gov.uk/government/publications/draft-legislation-for- cryptoassets
Stay tuned for more updates on this exciting crypto regulatory drama unfolding in the UK!
- In an attempt to curb potential debt accumulation in the crypto ecosystem, the Financial Conduct Authority (FCA) proposes banning credit usage in crypto purchasing.
- The FCA's proposal entails prohibiting crypto firms from allowing cryptocurrency purchases using credit cards, loans, or digital currency credit lines.
- This ban aims to discourage individuals from accruing unsustainable debt, particularly if the value of crypto assets were to drop significantly.
- The proposed regulation, if enacted, would not affect transactions involving stablecoins authorized by the FCA's new regulatory framework.
- The FCA invites the public to provide feedback on this proposal, accepting comments until June 13, 2025, and planning for additional consultations later in the year.
- The FCA's crypto regulation efforts include drafting new rules for crypto staking firms and a blanket ban on all crypto lending and borrowing platforms.
- Furthermore, the UK government recently proposed draft legislation to bring crypto firms under regulatory oversight, marking a broader effort to regulate the crypto market, investing, and personal-finance aspects.
