The Financial Conduct Authority (FCA) has revealed its plans to regulate crypto currencies and other assets as awareness and take up among retail investors continues to climb.
According to the FCA’s latest research on consumer attitudes and behaviours towards the digital asset class, some 12% of UK adults now own crypto, up slightly from 10% in 2022, but a threefold increase on the 4% who told the regulator they held the assets in 2020.
The average value of an individual’s holdings has also grown more than 15% from £1,595 to £1,842 over the past two years. More generally, since 2020, there has been a 20-percentage point increase in awareness of crypto, from 73% to 93%.
Significantly, the FCA noted that people were increasingly using a credit card, or other credit facility, to purchase cryptoassets – rising from 6% in 2022 to 14% in 2024 – with cash or other disposable income as a payment method falling seven percentage points to 72% over the last two years.
Matthew Long, director of payments and digital assets at the FCA, said that this increase in activity and awareness had compelled the regulator to act.
“Our research results highlight the need for clear regulation that supports a safe, competitive, and sustainable crypto sector in the UK,” said Long.
Currently, while businesses operating in the UK have to register with the FCA and abide by its anti-money laundering rules, investing in any type of crypto assets remains largely unregulated, meaning there is no provision for losses.
“While some rules are in place, currently crypto remains largely unregulated and high risk. That’s why we continue to warn people about scams and inform them of the risks associated with crypto,” said Long.
Some 27% of current users said they would be more likely to invest in cryptoassets if the sector was better regulated in the UK. Additionally, 25% told the FCA that more regulation would make them more likely to invest in cryptoassets, but only if it included some financial protection in the event of losses.
Publishing an indicative roadmap of key dates for the creation and introduction of the UK’s crypto regime today, the regulator has outlined a series of focused consultations, which it says should make policy development transparent and encourage engagement through a manageable and flexible process.
“We want to develop a sector that embraces innovation and is underpinned by market integrity and consumer trust,” Long added.
Following a change in legislation, which came into effect on October 8 2023, the FCA is responsible for regulating cryptoasset promotions and all marketing to a UK audience.
In the first year of the regime, the FCA has taken action against firms illegally promoting to UK consumers. This includes issuing 1702 alerts, taking down over 900 scam crypto websites and over 50 apps.
Read Financial Promoter’s coverage of some of the latest interventions, including BCAP restrictions of broadcast ads for cryptoassets, and the FCA’s previous efforts to warn crypto marketers of bad practice.