The United Kingdom is preparing to ban the purchase of cryptocurrency using borrowed funds — particularly through credit cards. The country’s financial regulator, the Financial Conduct Authority (FCA), has expressed concern that citizens are increasingly investing in digital assets while putting not only their savings at risk, but in some cases, personal property as well.
Interest in cryptocurrency is rapidly growing across the UK, especially following the recent price surge triggered by the U.S. elections. But alongside the hype, the number of people going all-in is rising. According to a YouGov poll, the proportion of Britons buying crypto on credit more than doubled in two years — from 6% in 2022 to 14% in 2024 – The Guardian reports. Experts are sounding the alarm: a recent UK parliamentary report compared such behavior to gambling, citing the high likelihood of total investment loss.
The FCA intends to prohibit retail investors from using credit and other forms of loans to purchase digital assets. According to the regulator, the crypto market remains highly volatile, and retail investors still lack adequate financial literacy. “We are witnessing a dangerous trend — people chasing profits are pushing beyond rational limits,” FCA representatives said.
The proposed measures are likely to provoke discontent within the fintech sector. Some companies have already voiced concerns that such restrictions could slow down the development of digital finance in the country. However, the authorities maintain that consumer protection comes first. The Treasury is drafting legislation that will expand the FCA’s authority to cover all organisations working with cryptocurrencies — including exchanges, intermediaries, and crypto lenders. The aim is to create a clear legal framework that fosters innovation while preventing abuse and safeguarding users.
Additionally, UK Chancellor of the Exchequer Rachel Reeves emphasized that Britain is working closely with the United States on cryptocurrency regulation. This may signal that a global tightening of digital asset oversight is becoming a shared international direction.
While cryptocurrencies continue to dominate headlines, British authorities appear determined to cool the enthusiasm — especially among those betting with money they don’t actually have.
Impact on the Fintech Sector
The potential ban on buying crypto with borrowed funds could deal a significant blow to a key segment of the UK’s fintech industry. Platforms that have grown largely due to surging interest in digital assets and frictionless access to markets for retail investors are likely to be hit the hardest.
Companies like Revolut, eToro, Coinbase UK, and several lesser-known brokers offer users quick and convenient access to crypto — often with built-in credit and overdraft features. A restriction on borrowing-backed transactions would force them to revise internal policies and possibly redesign user interfaces to comply with FCA requirements.
Moreover, the fintech sector may face a shrinking customer base. For many younger investors, the ease of “one-click” access to crypto — with minimal entry barriers — has been a major draw. Tougher regulations could dampen interest in platforms where credit can no longer be used, particularly in comparison with more permissive rules in other jurisdictions.
Investors might react too: if some fintech companies are forced to pause or limit their crypto services, their market valuations could take a hit. The sector as a whole risks losing a significant source of revenue and traffic.
Nevertheless, analysts argue that in the long run, the market will benefit from clearer rules of engagement. Building a mature regulatory environment could attract institutional investors, boost public trust in the industry, and weed out irresponsible players.