Crypto purchases on credit for private customers in Great Britain

The British financial supervisory authority Financial Conduct Authority (FCA) has published a proposal to use private individuals to use borrowed funds such as credit cards, private loans and electronic credit lines to buy cryptocurrencies. This project set out in the discussion paper DP25/1 aims to contain the risks of intolerable debts and speculative losses because the acceptance of cryptocurrencies increases in the British.

This step is directed against a worrying trend: In 2024, 14 % of crypto purchases in the United Kingdom were financed by loans, compared to 6 % in 2022. In view of the over 7 million British, which now have digital assets, the regulatory authorities fear that volatile price fluctuations could burden households with unsurpassable debt.

The ban would be applied to all forms of credit, although qualified stable coins, which are issued by the FCA authorized institutions, could be excluded-as regulated to the GBP or US dollar coupled token-reference to the increasing importance of stable coins in payment transactions.

FCA taps cryptoma markets and reactions in the industry

The intended restrictions on the regulation of digital currency markets include suggestions for the containment of crypto loans, the creation of fuses for staking, the transparency obligation for crypto exchanges and the definition of what defi is.

However, these proposals encounter expected challenges and could possibly affect the sector's innovative strength. For example, the FCA runs danger in an area in which the United Kingdom is aiming for a global leadership role to suppress innovations. Previous crises have shaped their attitude, such as that Prohibition of crypto derivatives For retail in 2021, which, according to reports on young dealers who suffered six -digit losses, was issued. Now that the use of crypto loans has doubled, the authority is intensifying its regulatory efforts.

But the regulatory authority is planning a forum with interest groups to collect feedback, and the message is clear: consumer protection is above the libertarian ideal digital assets.

The British advance follows global trends. With its Market in Crypto-Assets (Mica), the EU is planning regime for 2026 strict protective measures for consumers, while the United States aims through enforcement measures on the digital credit market. But the FCA's ban on credit is one of the most direct measures against speculative shops of small investors.