The United Kingdom\u2019s financial regulator, the Financial Conduct Authority (FCA), plans to stop retail investors from borrowing money to fund their crypto investments.<\/p>\n
According<\/a> to a May 2 Financial Times report, the ban on borrowing to fund crypto purchases is one of the upcoming crypto rules by the FCA. David Geale, FCA executive director of payments and digital finance, told the FT that \u201ccrypto is an area of potential growth for the UK, but it has to be done right.\u201d He added:<\/p>\n \u201cTo do that we have to provide an appropriate level of protection.\u201d<\/p>\n Geale denied claims that the FCA is hostile to the crypto industry. Instead, he explained that he views the industry as offering high-risk investments with less consumer protection. \u201cWe are open for business,\u201c he said.<\/p>\n The interview follows the FCA seeking<\/a> feedback on regulating the crypto market. In an attached document<\/a>, the regulator noted that it is \u201cexploring whether it would be appropriate to restrict firms from accepting credit as a means for consumers to buy cryptoassets.\u201d<\/p>\n FCA crypto regulation discussion paper. Source: <\/em>FCA<\/em><\/a><\/p>\n The FCA did not respond to Cointelegraph\u2019s inquiry by publication.<\/p>\n Related: <\/strong><\/em>FCA releases discussion paper on crypto market transparency, abuse<\/strong><\/em><\/a><\/p>\n The FCA aims to regulate the domestic cryptocurrency market, ruling over trading platforms, intermediaries, crypto lenders and borrowers, as well as decentralized finance (DeFi) systems. The regulator reportedly plans to introduce stricter rules for crypto services aimed at retail investors than those offered exclusively to professional or sophisticated investors.<\/p>\n Gale explained that the agency aims to develop a framework \u201cthat is safe and is competitive.\u201d He said that the regulator aims to develop a regulatory regime that would attract businesses:<\/p>\n \u201cIf we can get the regulatory regime right it actually becomes attractive for firms. That is what we are trying to achieve.\u201d<\/p>\n Related: <\/strong><\/em>UK\u2019s finance watchdog defends \u2018too tough\u2019 crypto stance<\/strong><\/em><\/a><\/p>\n The regulator explained that its upcoming ban to restrict lending to fund consumers\u2019 crypto purchases is motivated by a concern over \u201cunsustainable debt, particularly if the value of their crypto asset drops and they were relying on its value to repay.\u201d The ban would also include credit card purchases.<\/p>\nFCA\u2019s upcoming rules<\/h2>\n
The FCA lending ban<\/h2>\n