UK Watchdog Considers Credit Ban for Crypto Purchases

The UK's Financial Conduct Authority (FCA) is considering a potential ban on the use of credit cards and other forms of credit for purchasing cryptoassets, citing growing concerns about consumer debt, reports Finextra. A recent YouGov survey commissioned by the FCA found that the number of people using credit to buy crypto has more than doubled — from 6% in 2022 to 14% in 2024. The regulator is particularly worried that individuals relying on credit may face financial difficulties if the value of their crypto holdings declines.

While some major payment providers have already imposed their own restrictions, the FCA is now evaluating a broader, industry-wide prohibition. Notably, the proposed restrictions may not apply to certain stablecoins issued by FCA-authorised firms. This proposal is part of a discussion paper that follows new draft legislation from the UK government aimed at expanding the FCA's authority over crypto firms. The goal is to establish a clearer regulatory framework that supports innovation while enhancing market integrity and consumer safety.

David Geale, Executive Director of Payments and Digital Finance at the FCA, stated:“Crypto is a fast-growing sector that remains largely unregulated. We're working to establish a framework that allows responsible innovation while ensuring consumer protection and market stability. We want to ensure we're striking the right balance.”

Stakeholders are invited to comment on the discussion paper until June 13. A more formal consultation will follow later this year as the FCA develops the final regulatory framework.