UK FCA to Ban Bitcoin & Crypto Buying With Credit Cards

Buying crypto involves a certain amount of risk. So, investment experts recommend caution and diversification. But some individuals continue to pour their entire life’s savings into these digital assets like Bitcoin and other crypto assets. What’s more, some even go as far as buying them on credit. Now, the UK FCA has some bad news for such crypto enthusiasts. Proposed Ban on Using Credit Cards to Buy Crypto On Friday, May 2, the United Kingdom’s Financial Conduct Authority (UK FCA) recommended a radical new measure: a ban on using credit cards to purchase cryptocurrency assets. The growing tendency of utilizing borrowed money to buy cryptocurrency has prompted the proposed prohibition. A recent survey commissioned by the United Kingdom’s YouGov found that this trend is not negligible anymore. In fact, customers who paid for crypto assets with a credit card or existing credit facility more than doubled from 6% in August 2022 to 14% in August 2024. However, regulators continue to warn that crypto assets like Bitcoin are inherently volatile, and using credit to buy them puts the entire system at risk. FCA says that it aims to foster innovation in crypto within a secure framework with the new regulations. Critics, however, call attention to possible regulatory overreach and doubt the regulator’s capacity to enforce these intricate guidelines. Released for public comments on Friday, the new proposal seeks to reduce consumer debt risks connected with erratic digital assets. Industry players have till June 13, 2025, to comment on the ideas. UK FCA Proposes Regulatory Overhaul ​ of Crypto The ban on the use of credit cards to buy crypto is part of the FCA’s broader regulatory framework to bring crypto asset activities under comprehensive oversight.​ The FCA’s discussion paper, released on Friday, proposes sweeping new regulations for almost the entire crypto chain, including trading platforms, intermediaries, and lenders. With this, the key financial regulatory authority in the United Kingdom is striving for improved market integrity, consumer protection, and alignment with developing crypto norms worldwide. In a fintech event earlier this week, the UK’s Finance Minister, Rachel Reeves, had revealed the plan for the regulatory initiative alongside efforts to deepen collaboration with the United States. The proposal also mandates crypto platforms to isolate client transactions from proprietary trading, apply strong mechanisms to identify market abuse, and improve transparency criteria. Regulators expect that such measures may enhance governance practices among crypto platforms, potentially avoiding episodes like the collapse of Celsius and FTX. The regulator also emphasized the need to reassess the appropriateness of crypto investments for consumers and attempts to prevent misleading promotions. Like the UK, the Financial Services Agency of Japan also took steps towards crypto regulation just last month with the release of a discussion paper that classified digital assets based on the distribution of funds. The UK aims to position itself as a potential hub for digital assets. However, how the crypto community would respond to the FCA’s new norms to regulate crypto assets remains to be seen. ✓ Share: Deekshith Pinto Deekshith is a seasoned news editor with over a decade of experience in the news and media industry. He began his career as an engineer at Toyota but soon swapped tools for storytelling. After his master’s at Nalanda University, he joined Times Internet as a staff writer. Over the next few years, he served as the News Editor for Indian bureaus of multiple international platforms, mainly The Weather Channel and Business Insider. He scaled both these large platforms and mentored dynamic teams of young writers and content creators. His editorial instincts are driven by a passion for storytelling, a fascination with data, and just the right amount of chaos to keep things interesting. Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss. Source: https://coingape.com/uk-fca-to-ban-bitcoin-crypto-buying-with-credit-cards-heres-all/