Overview

• The UK government has introduced draft laws to regulate cryptocurrencies, bringing exchanges, dealers, and issuers under existing financial rules for the first time.
• The Financial Conduct Authority (FCA) proposes banning the use of credit cards for crypto purchases and restricting retail lending and borrowing of cryptoassets.
• Consumers would still be allowed to use borrowed funds to purchase stablecoins issued by FCA-regulated companies, maintaining some flexibility in the market.
• The FCA plans to enhance transparency around staking, a process involving locking digital tokens for rewards, and improve consumer understanding of associated risks.
• These measures aim to protect retail investors, with the FCA warning that crypto investments carry high risks, including the potential for total financial loss.