UK Introduces New Cryptocurrency Rules: Licensing, Credit Purchase Ban, and DeFi Regulation

The UK Treasury has unveiled a draft law that formally brings digital assets under financial supervision.

The United Kingdom is set to tighten regulation of the cryptocurrency sector. The Treasury has introduced a draft bill that would officially classify digital assets as part of the financial regulatory framework. Under the proposed legislation, companies dealing with cryptocurrencies will be required to obtain licenses from the Financial Conduct Authority (FCA) and comply with strict regulatory standards.

Following this, on May 2, 2025, the FCA released a consultation paper outlining proposed rules for key areas of the crypto industry, including trading platforms, brokers, lending, staking, and decentralized finance (DeFi). One of the key measures includes a ban on retail investors purchasing cryptocurrencies with borrowed funds, including via credit cards.

The initiative is aimed at protecting consumers and ensuring market stability. The consultation will remain open until June 13, after which the final regulations will be confirmed. Experts view this move as a step toward making the UK a “safe haven” for legal and transparent crypto activity.