The British say "enough" to crypto purchases on credit - new law from the FCA is coming

The British say “enough” to crypto purchases on credit – new law from the FCA is coming

The British Financial Conduct Authority (FCA) has just released the DP25/1 document, which has caused quite a stir in the cryptocurrency world. It concerns planned changes that are to prohibit financing crypto purchases using consumer loans – including credit cards and e-wallet limits.

The regulator goes even further – it wants to cut off the average Joe from companies lending on crypto and services such as staking or DeFi, until hard licenses and clear rules for investor protection are introduced.

What does this mean? The FCA is sounding the alarm because more and more Britons are playing crypto “on leverage” – using borrowed money. In 2022, there were 6% of them, but in 2024 it will be 14%. Such dynamics are a ready recipe for problems, so the office wants to end the debt spiral before it gets really hot.

Leverage, volatility and... trouble?

The FCA does not mince its words in the report – the volatility of Bitcoin and altcoins, combined with financial leverage, is an explosive mix. If something goes wrong (and it often does), the consequences can affect not only the wallets of speculators, but also the entire financial system.

Add to this the aggressive marketing promising quick profits. And as we know – when people see the vision of easy money, they often stop reading the small print and forget that no one guarantees them a return or deposits. If they enter it on credit – it gets really dangerous.

David Geale from the FCA claims that transparent rules of the game can build trust in the industry and allow it to develop in a healthy way. I agree – if we want long-term market growth, we need to combine innovation with responsibility.

Will the rest of Europe follow suit?

Consultations with the industry will last until 13 June 2025, and the first specific legislative details are to appear in the autumn. If all goes according to plan, the new regulations will come into force in early 2026.

This could be an important moment not only for the UK. London has a chance to become a European hub for blockchain projects, provided it offers clear rules and transparent licenses. But – and here comes the question mark – if the regulations are too rigid, innovators may move to places where the rules are more flexible.

My take? Education and transparency are key. Prohibitions are no substitute for awareness. But if they help to curb dangerous practices – they can be a good start.

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