The United Kingdom Financial Authority, the Financial behavior body (FCA), plans to prevent retail investors from borrowing money to finance their encryption investments.
According to To the Financial Times report, the ban on borrowing to finance the purchases of encryption is one of FCA’s encryption rules. David Gill, Executive Director of Payments and Digital Finance, told FT that “Crypto is a field for the potential growth of the United Kingdom, but it must be done correctly.” He added:
“To do this, we have to provide an appropriate level of protection.”
The generation of allegations denied that FCA is hostile to the encryption industry. Instead, he made it clear that the industry is seen as providing high -risk investments with less consumer protection. “We are open to work,” he said.
The interview follows FCA Pursuit Reactions to the regulation of the encryption market. In an attachment documentThe organizer noted that “explores whether it is appropriate to limit the companies to accept credit as a means of consumers to purchase encryption.”
FCA did not respond to Cointelegraph by publishing.
Related to: FCA release a discussion paper on the transparency of the encryption market, ill -treatment
Next FCA rules
FCA aims to organize the local cryptocurrency market, judge trading platforms, brokers, encryption lenders and borrowers, as well as decentral financing systems (Defi). According to what was reported, the organizer plans to provide strict rules for encryption services that aim to retail investors from those provided exclusively for professional or advanced investors.
Gil explained that the agency aims to develop a “safe and competitive” framework. He said that the organizer aims to develop a regulatory system that attracts companies:
“If we are able to obtain the regulatory system properly, it will actually be attractive to companies. This is what we are trying to achieve.”
Related to: UK financing control defends the “very difficult” encryption position
FCA lending ban
The organizer explained that its next ban to restrict lending to finance the purchases of encoding for consumers is concerned with concern about “unusual debts, especially if the value of their encryption assets decreases and they depend on their value to pay them.” The ban will also include credit card purchases.
While 2024 FCA research Show The “leading payment method for encryption between Cryptoasset users is still the cash/income available to the individual (72 %)”, and the increasing trend in credit purchases is highlighted. The research cites that only 6 % of credit purchases were performed in 2022, but this scale rose to 14 % in 2024.
FCA is also planned to prevent retail investors from accessing encryption lenders and borrowers. Other concerns about the encryption market cited the organizer include manipulation of the market, conflicts of interests, settlement failure, lack of transparency, lack of liquidity, and unreliable trading systems.
To alleviate these issues, the regulator plans to request equal commercial transaction through encryption trading platforms. Other possible rules include enforcement of the separation of royal trading activities from those that are for retail investors and demanding transparency on commercial pricing and implementation.
Trading platforms will be banned from intermediaries to flow requests, and exciting services users must be compensated for any potential losses resulting from third parties. FCA plans to exempt Defi systems without central operations, as long as it is not a “clear controlling person”.
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