The UK’s financial regulator is exploring a ban on using credit cards to buy cryptocurrencies like bitcoin, as part of a wider crackdown on high-risk retail crypto investing.
In a discussion paper published on Friday, the Financial Conduct Authority (FCA) warned that borrowing to invest in cryptoassets could lead consumers into unsustainable debt. The proposed restriction would prevent firms from accepting credit cards or credit lines from e-money providers for crypto purchases.
“We are exploring whether it would be appropriate to restrict firms from accepting credit as a means for consumers to buy cryptoassets,” the regulator stated. “We are considering a range of restrictions, including restricting the use of credit cards to directly buy cryptoassets.”
The move is aimed at limiting risky financial behaviour, particularly among retail investors, who the FCA believes may be vulnerable to the volatile nature of crypto markets. The paper also proposes blocking consumer access to crypto lenders, which often offer high returns but come with complex risks and limited protections.
David Geale, the FCA’s executive director of payments and digital finance, told the Financial Times: “Crypto is an area of potential growth for the UK but it has to be done right. To do that we have to provide an appropriate level of protection.”
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