UK cracks down on crypto as Trump-era risks resurface
Britain is preparing to tighten cryptocurrency rules. This comes as regulators fear growing consumer exposure to high-risk financial behavior—similar to what surfaced during the Trump era in the U.S. The Financial Conduct Authority (FCA) now plans to restrict crypto purchases made with credit cards.
This move mirrors global regulatory concerns first amplified under Donald Trump, when crypto gained widespread popularity. The FCA warns consumers should be ready to lose all their money when investing in crypto.
Trump-style speculation drives regulatory urgency
During Trump’s presidency, financial markets embraced deregulation. That spirit helped fuel crypto’s explosive growth. However, it also exposed retail investors to speculation.
In the UK, crypto ownership has reached about 7 million people—around 12% of adults. Yet the market remains largely unregulated. That’s about to change. The FCA wants to bring crypto trading, lending, and exchanges under a mandatory rulebook.
The goal is to protect consumers from excessive risk-taking, especially when borrowing to invest in volatile assets.
New UK rules target credit-based crypto buying
A core part of the new proposal restricts using credit cards to buy crypto. The FCA said it is also considering banning purchases using credit from e-money firms.
According to recent surveys, 14% of crypto investors used credit in 2023—more than double the rate in 2022. This surge in borrowing recalls the financial recklessness of Trump-era markets, where speculation often outweighed financial caution.
Stablecoin purchases using borrowed funds would still be permitted—but only when issued by FCA-regulated entities.
Lending, staking, and Trump-era echoes
Crypto lending and borrowing also face new scrutiny. These activities represent a small slice of the market but carry major risks. Consumers face liquidity problems, limited credit checks, and often don’t fully understand the terms.
The FCA’s draft rules aim to restrict crypto lending to individuals unless investment knowledge and creditworthiness are verified. This is a shift away from the laissez-faire attitude that marked Trump-era financial policy.
The regulator also wants to improve transparency around staking. About 27% of UK crypto holders currently engage in staking, where users lock tokens in exchange for rewards.
Balancing innovation with post-Trump caution
Despite the new restrictions, the UK government insists it still supports innovation. Officials want to create an environment that welcomes blockchain growth—without falling into the pitfalls seen in previous financial cycles.
During Trump’s tenure, many regulators downplayed the need for crypto oversight. Today, UK authorities seem determined to avoid similar mistakes.
Institutional investors will continue to access crypto markets, but retail traders could see new hurdles ahead. These measures reflect a global trend: protecting individuals without stifling the entire digital asset economy.
Trump legacy looms over crypto regulation
The rise of crypto overlapped significantly with Trump’s presidency. His administration’s minimal regulation allowed digital assets to flourish—but also made room for scams and reckless investing.
Now, with the UK taking firm steps toward crypto regulation, the legacy of Trump’s hands-off financial philosophy is being reconsidered. While innovation is crucial, unchecked speculation has proven dangerous.
As Britain crafts its first comprehensive crypto framework, echoes of the Trump era serve as both a lesson and a warning.