FCA warns against crypto investment, recommends stocks instead
The FCA urges a shift toward stocks and bonds to promote long-term financial health
The UK's top financial regulator, the Financial Conduct Authority (FCA), has expressed concern about young investors choosing crypto over traditional financial products.
FCA head pointed to a significantly lower rate of equity ownership in Britain compared to the U.S. and Sweden.
Key takeaways
- FCA head Nikhil Rathi says too many under-35s in the UK are choosing crypto as their primary investment.
- 12% of UK adults currently hold crypto assets.
- The FCA urges a shift toward stocks and bonds to promote long-term financial health.
A rising crypto trend among young Britons
Nikhil Rathi, CEO of the Financial Conduct Authority (FCA), warned Parliament this week that an increasing number of Britons—especially under the age of 35—are treating cryptocurrency as their gateway into investing. He called this trend “not great,” noting that several million younger UK residents hold crypto rather than traditional assets like stocks or bonds.
Crypto activity in different countries. Source: Chainalysis
Rathi emphasized that crypto remains highly volatile and largely unregulated in the UK. “If something goes wrong, it is unlikely you will be protected,” he said, echoing the FCA’s earlier caution that investors should be prepared to lose all their money.
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Lack of equity ownership compared to global peers
Rathi also raised alarms over the comparatively low number of Britons who directly own shares, especially when benchmarked against countries like the United States and Sweden. The FCA is concerned that this lack of engagement in equity and bond markets could hurt long-term financial outcomes for UK investors.
To counter this, the FCA is launching a new five-year strategy to encourage greater public participation in regulated financial markets. This includes educating the public on the benefits of equity and bond investing and supporting firms that promote safe, long-term investment vehicles.
Moving forward: education and regulation
While awareness of cryptocurrency in the UK is growing—rising to 93% of adults, up from 91%—Rathi stressed the importance of a balanced investment strategy rooted in regulated markets. The FCA continues to call for clearer crypto regulations and compliance with anti-money laundering rules for digital asset firms.
The FCA’s push to shift investor focus back toward regulated financial instruments highlights growing concern over the role of crypto in the portfolios of new investors. With a long-term national strategy now in place, the coming years may see more Britons turning toward equities and bonds under FCA guidance.
We previously reported that UK Regulator FCA fines Mako £1.66M over £92B cum-ex trades.
