According to the latest news piece from the Guardian, the UK is making another move to tighten its crypto regulations. This time, new UK crypto regulations will be targeting how people pay for their digital assets.
The latest proposal is to ban consumers from purchasing crypto using borrowed funds, including credit cards.
On the surface, this may sound like a niche rule. However, it has bigger implications for how the UK views the crypto market, and perhaps more importantly, how it expects consumers to interact with it moving forward.
What triggered this regulatory push?
According to the Financial Conduct Authority (FCA), the rise in crypto purchases made with borrowed money is becoming a serious concern. Many believe problems will be solved if the UK bans crypto altogether, but that doesn’t seem like a viable move. Instead, they’re trying to find balance between innovation and protecting consumers, and this move leans more toward the latter.
In just one year, the percentage of people using borrowed funds to buy crypto doubled from 6% to 14%. This increase and the concerns that crypto investing is becoming more like gambling have led regulators to step in and suggest measures.
Is this a crypto ban in disguise?
Not exactly. This is not a broad UK crypto ban, and the UK hasn’t banned crypto itself. It remains legal to buy, sell, and hold digital currencies. However, this move shows the country is getting closer to treating crypto like any other high-risk financial product.
The intention is clear: they want to make it harder for inexperienced or over-leveraged individuals to get into speculative assets without understanding the risks.
For those already deep into it, especially institutional investors or retail traders, the impact may be minimal. But for newcomers hoping to “get rich quick” using borrowed cash, those doors may soon close.
What could this change mean in the short and long term?
Short term, the market may see a dip in retail buying volume, particularly from newer investors. But in the long term, this might actually help.
By limiting risky borrowing, the UK could create a more stable and reliable crypto market. It could attract more serious investors and reduce volatility as fewer people make impulsive, debt-driven trades.
However, overly strict rules might push some users to unregulated platforms, weakening efforts to protect consumers. It’s a delicate balance that UK authorities will need to keep monitoring closely.
Could crypto gambling feel the shockwaves?
Here’s the tricky part. The UK Gambling Commission doesn’t license crypto gambling sites. That makes many UK players turn to offshore platforms, often using borrowed funds.
By banning credit card and loan use for crypto purchases, this regulation could make it harder for players to access these sites, potentially leading to fewer players, more caution, or a shift to alternative payment methods like bank transfers or P2P exchanges.
