UK Proposes Sweeping Crypto Credit and Lending Ban

The UK's Financial Conduct Authority (FCA) has proposed sweeping new regulations for the crypto sector, which may include a nationwide ban on crypto-backed loans and restrictions on using credit cards or borrowed funds to purchase cryptocurrencies. The measures are intended to address escalating concerns over consumer protection, financial stability, and systemic risk from unregulated crypto lending, DeFi protocols, and speculative trading. The FCA notes a sharp rise in UK consumers using credit for crypto investments, from 6% in 2022 to 14% in 2023, and cites the collapse of Celsius Network as a warning sign. The proposals may exempt regulated stablecoins and will require stricter oversight of trading platforms and intermediaries. Public feedback is being sought until June 2025, after which the rules will be finalized. These moves align the UK's regulatory approach more closely with the United States than with the European Union.