Key dishes to remember
- The British FCA proposes to prohibit the use of credit cards for the purchase of Bitcoin in order to mitigate the risk of consumer debt.
- The FCA aims to increase the regulation of the cryptography market by demanding entities based in the United Kingdom and by slowing down the cryptography loan services.
Share this article
The best financial regulator in the United Kingdom plans to prohibit the use of credit cards and other forms of credit to buy Bitcoin and other cryptographic assets due to increasing concerns about consumer debt and financial damage.
The proposal appears in a new discussion document (DP25 / 1) published Friday by the Financial Duct Authority (FCA), which warns that cryptographic assets represent high -risk and speculative threats to consumers, especially when purchased with money borrowed.
“We are concerned about the fact that consumers buying cryptographic assets with credit can take an unsustainable debt, in particular if the value of their cryptographic assets drops and that they count on its value to be reimbursed,” wrote the FCA.
The FCA has also noted that many investors in British crypto wrongly believe that they are protected by mechanisms such as the Scheme of Financial Services remuneration (FSCS) or the financial service (FOS). In reality, most cryptographic investments do not have such protections, and losses are not recoverable in the event of fraud, theft or bankruptcy.
The agency said it evaluated several options, including restriction or ban on the use of credit cards to finance cryptography purchases, with the aim of reducing the risk of consumer overvaluation and speculative loss.
This decision follows a similar reasoning line behind the prohibition of the FCA in 2021 on the sale of cryptographic derivatives to retail investors.
However, the FCA said it is considering exempting stables for qualification from the restrictions proposed.
The FCA has a complete framework for cryptography regulations
Beyond the proposed credit restriction, the FCA discussion document describes a full plan for the regulation of the digital asset market in the United Kingdom, including trading platforms, intermediaries, childcare suppliers, loans, jalitude and aspects of decentralized finance (DEFI).
According to the newspaper, all crypto trading platforms serving retail customers in the United Kingdom should be authorized by the FCA, with potential restrictions on the main trading. Intermediaries such as brokers would be held to traditional financial standards.
Cryptographic loan and loking products providers should meet strict requirements for capital, liquidity and risk management, while certain challenges of challenge, including frontal operators and governance tokens, could become responsible under new rules.
The FCA seeks industry and public comments to assess the implications and feasibility of new measures. The responses to the discussion document are open until June 13, 2025, after which the FCA will begin to formulate formal policy proposals.
The press release comes after the British government unveiled a bill to regulate cryptographic assets earlier this week.
The proposed framework obliges the standards of transparency, consumer protection and operational resilience for cryptographic companies, similar to those of traditional financial sectors.
Share this article
