UK Preparing To Ban Consumers From Buying Crypto With Borrowed Funds

The UK financial regulator is preparing to ban retail investors from using borrowed funds such as credit card balances to invest in cryptocurrency as it seeks to overhaul supervision of the fast-growing digital assets market. The soaring values of virtual currencies such as bitcoin after Donald Trump’s election have put pressure on the Financial Conduct Authority (FCA) to take a tougher line while it also lays the groundwork for the industry to flourish in the UK.

According to a recent YouGov survey, the proportion of people in the UK using borrowed funds to make crypto purchases more than doubled from 6% in 2022 to 14% last year. Borrowing to fund investments, when asset values could change dramatically, meant consumers risked losing their entire investment and potentially other assets, such as their home. These characteristics closely resembled gambling, the Treasury committee found.