UK Lifts Ban on Crypto Exchange-Traded Notes
The UK government has removed its ban on crypto exchange-traded notes (ETNs). The Financial Conduct Authority (FCA) announced on Wednesday that retail investors can now buy crypto ETNs through FCA-approved UK exchanges.
Crypto ETNs are debt products that let investors gain exposure to cryptocurrencies without owning them directly. They trade like regular securities. The underlying assets are held securely by regulated custodians.
FCA Cites Market Maturity for Ban Removal
David Geale, FCA’s Executive Director of Payments and Digital Finance, said the market has evolved since the ban. He stated, “Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood. We’re providing consumers with more choice, while ensuring there are protections in place.”
The FCA first banned crypto ETNs in January 2021 due to risks to retail investors and a lack of legitimate investment need. The ban on retail access to crypto derivatives remains in place. The FCA will continue to monitor high-risk products closely.
Crypto ETNs Allowed in Retirement Funds and ISAs
The UK government also announced favorable tax treatment for crypto ETNs in certain investment accounts. From October 8, these products can be included in registered pension schemes. By April 2026, Stocks & Shares Individual Savings Accounts (ISAs) will allow crypto ETNs.
This move offers tax-incentivized options for investors to enter the crypto market with added safety.
Market Growth Expected After Ban Lift
Research by IG Group suggests the UK crypto market could grow by up to 20% after crypto ETNs return. Their study found 30% of UK adults would consider investing in crypto via ETNs. Investors are attracted by perceived safety and regulatory oversight.
This interest is higher than current crypto ownership levels, which range from 12% to 25%. The FCA’s decision marks a significant step for the UK crypto industry. It balances innovation with consumer protection and opens new opportunities for retail investors.
