LONDON — The Financial Conduct Authority (FCA) is proposing a new ban on using credit cards to buy cryptocurrency in the UK, in a bid to shield retail investors from financial harm and bring digital assets under stricter regulatory control.
FCA Targets Borrowed Funds in Crypto Transactions
In a statement released Friday, the FCA confirmed it is evaluating a ban on using credit cards and e-money credit lines for purchasing cryptoassets. This move aligns with the regulator’s ongoing campaign to reduce consumer exposure to high-risk financial products, particularly in volatile crypto markets.
The FCA emphasized that buying digital currencies with borrowed money can significantly magnify losses for individual investors. The proposed restrictions are part of a broader package of measures designed to strengthen protections and prevent unsustainable debt.
UK to Align Crypto Oversight with Traditional Finance
The announcement follows draft legislation introduced earlier this week that would place crypto exchanges, issuers, and service providers under the same regulatory standards as traditional financial institutions. This represents a major step toward integrating the UK’s crypto market into the broader financial oversight framework.
By classifying crypto platforms similarly to banks and brokers, UK authorities aim to enforce stronger compliance, anti-money laundering rules, and consumer safeguards.
Industry Response and Next Steps
A formal consultation period will allow crypto firms, financial experts, and the public to submit feedback on the proposed credit card ban. The FCA will consider these responses before issuing final regulations.
Similar measures have already been implemented in countries like Canada and the U.S., where regulators seek to curb speculative trading funded by personal debt.
