The United Kingdom plans to ban the use of credit cards to purchase Bitcoin and cryptocurrencies
The United Kingdom intends to impose new restrictions on the use of credit cards for purchasing Bitcoin and cryptocurrencies, in a move that reflects growing concerns about rising consumer debt associated with investing in high-risk digital assets.
This proposal was included in a discussion paper issued by the Financial Conduct Authority (FCA) titled DP25/1, warning that buying cryptocurrencies with borrowed money could lead to unsustainable debt, especially in light of price volatility and some individuals relying on the value of these assets to meet their obligations.
The authority is considering a complete or partial ban on the use of credit, including credit cards, to finance cryptocurrency purchases.
This includes a move to curb excessive borrowing and avoid losses resulting from speculative trading.
The paper also noted that a number of investors mistakenly believe they are covered by compensation schemes such as FSCS or FOS, while these mechanisms do not cover most digital assets.
At the same time, qualified stablecoins may be exempt from these proposed restrictions, reflecting a potential recognition of their importance in payment and transfer operations.
This initiative comes as part of broader efforts to regulate the cryptocurrency sector in the United Kingdom.
