UK to Ban Buying Crypto with Credit Cards
The UK is planning to ban consumers from using credit cards or other forms of debt to buy cryptocurrencies, according to proposals released by the Financial Conduct Authority (FCA) on Friday. The ban is part of a broader effort to regulate the fast-growing but volatile crypto sector and protect retail investors from “unsustainable debt.” Around 14% of crypto buyers in the UK used borrowed money to invest last year, more than double the figure from 2022.
Alongside the credit ban, the FCA also wants to block individual investors from using crypto lending and borrowing platforms like the now-defunct Celsius Network. These services, which offer users returns for lending crypto or loans backed by crypto, have been flagged for risks including illiquidity, lack of oversight, and poor consumer understanding. Consumers would still be allowed to use regulated stablecoins and could continue staking, though with new safeguards around transparency and reimbursements for losses due to third-party actions.
The new rules would also require crypto firms to set up a legal entity in the UK, ensure transparency in pricing, and stop paying intermediaries for order flow. David Geale of the FCA said the goal is to encourage growth while protecting consumers, adding, “Crypto is an area of potential growth for the UK but it has to be done right.” Crypto companies have until June 13th to respond to the proposals.
