The Financial Supervisory Authority (FCA) of the United Kingdom has taken action for new regulations that will prohibit the use of credit in crypto investments.
The goal is clear: to stop the increasing borrowing in the crypto market and protect the investor against high-risk positions.
According to the FCA's proposal, investors will no longer be able to buy cryptocurrency through borrowing methods such as credit card, personal loan or e-money loan.
This decision aims to bring the rapidly growing digital asset market to a more controlled structure.
Why Is This Step Being Taken?
While the purchase rate of crypto investments with debt was 6% in 2022, this rate increased to 14% in 2024.
This means that investors face the risk of not being able to pay their debts, especially during periods of sharp market declines.
The FCA notes that this situation is unsustainable and draws attention to the “high-risk and speculative” nature of crypto assets.
In a statement, it was emphasized that crypto investors should be prepared to lose all their money.
The Scope of the New Regulation Is Wide
The ban is not limited to credit cards only. The FCA offers a broad framework that also covers different borrowing methods, such as personal loans and e-money loans.
Despite this, it is stated that some stablecoins issued by organizations authorized by the FCA may be exempt from this regulation.
In addition;
- How crypto trading platforms separate their own transactions from user transactions,
- Ensuring transparency in transaction pricing and execution processes,
- To cover the losses caused by third parties of the organizations providing staking services
such applications will also be made mandatory.
How Will the Process Work?
The crypto sector supports the FCA's investor protection-oriented approach in principle, but there are some reservations about its implementation.
In particular, it is a matter of curiosity how to implement such a complex regulatory structure effectively.
The FCA plans to collect opinions from the public by June 13, 2025.
After this process, the final regulations are expected to come into force.
