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- The UK's Financial Conduct Authority has proposed banning the use of credit to purchase crypto assets.
- The public can submit comments to the regulator on this rule until June 13, 2019.
Britain’s top regulator of financial services has proposed that cryptocurrency purchases made with credit card or any other borrowed money be prohibited.
New discussion Paper The UK Financial Conduct Authority announced a proposal this week that would prohibit crypto companies from allowing British consumers to purchase crypto assets using a credit cards. The rule proposed would prohibit the purchase of cryptocurrency with other forms of credit including digital currency lines of credit and loans.
This move is a result of the UK regulator being concerned that adults in the UK are taking on debts to purchase crypto. It’s deemed “risky”, given the volatility inherent in digital assets.
We are worried that customers who purchase crypto assets using credit will be saddled with unsustainable debt. This is especially true if they rely on the crypto asset’s value for repayment.
According to a YouGov study commissioned recently by the Authority, 14% of UK cryptocurrency users admitted using credit cards in August 2024. This was a 133% increase from the previous two years.
If the proposal is passed, it will not impact all cryptocurrency assets. Stablecoins approved by the FCA’s regulatory system will likely be excluded from this credit ban.
It has opened up the process of rulemaking for public comment. The FCA says that it will accept The following is a list of the most recent entries. The proposal is open until the 13th of June.
FCA also made other proposals related to crypto, which include: a rule making crypto-staking firms responsible for losses suffered by consumers if the company has not “adequately assessed” its operational and technological resilience (including third-party dependency), as well as a complete ban on lending and borrowing crypto platforms.
Andrew Hayward edited the book
