FCA Lifts Ban, Opening Crypto ETNs to UK Retail Investors
- FCA ends four-year retail ban, giving retail investors first-time access to crypto ETNs.
- UK aligns with major markets, expanding regulated crypto investment options for individuals.
- The decision marks rising confidence in crypto and stronger investor protection measures.
The UK’s Financial Conduct Authority (FCA) has officially lifted its four-year retail ban on crypto exchange-traded notes (ETNs), marking a turning point in the nation’s stance toward digital assets. The decision opens the door for individual investors to gain exposure to cryptocurrencies through regulated financial products for the first time.
This relocation places the UK at the same level as the United States, Canada, Hong Kong, and a number of EU countries, where investments in crypto-linked assets are already available to retail investors. The new regulations allow crypto ETNs to be traded in FCA-approved investment exchanges, which extends their reach beyond professional investors.
FCA Eases Stance as Crypto ETNs Evolve Toward Mainstream Adoption
Crypto ETNs are debt instruments that track the price action of a cryptocurrency, but do not involve having to hold the underlying digital asset. These are traded similarly to other securities, with the underlying crypto being securely stored by licensed custodians.
Crypto exchange-traded notes (ETNs) have not been listed on the London Stock Exchange despite the regulatory green light. Retail investors would have to wait until the listings are open, and the crypto derivatives prohibition is still in place. The FCA said it is going to keep an eye on the market and redefine its position on high-risk investment products as the market matures.
David Geale, executive director of payments and digital finance at the FCA, said the crypto market has developed notably since retail access to ETNs was first limited. He explained that these products are now more mainstream and better understood by investors. Geale added that the FCA’s goal is to expand consumer choice while keeping strong protections in place.
In January 2021, the FCA initially proposed the retail ban, claiming that crypto ETNs were not well adapted to retail investors and extremely risky because of volatility and lack of knowledge. Regulators of the time claimed that there was no valid investment requirement such that retailers should access such products.
The recent move by the regulator is an indication of a significant change in policy since the UK government has been devising a holistic crypto regulation framework. The development is after an increasing awareness of the maturity of the sector and its changing investor appetite.
The FCA also relaxed its grip on ETNs, but reiterated its stance on crypto derivatives, keeping them illegal among retail traders. The agency highlighted continuous monitoring of the developments in the market and made a commitment to review its approach, provided that the conditions improve.
UK Expands Tax Benefits and Strengthens Framework for Crypto ETN Investments
Concurrently with the FCA’s pronouncement, the UK government published updated guidance on how crypto ETNs are taxed. From October 8, crypto ETNs are allowed in registered pension schemes and, from April 2026, they will also be eligible to hold them through Stocks & Shares Individual Savings Accounts (ISAs).
Related: US And UK Form Joint Crypto Task Force To Implement Rules
The Treasury has reaffirmed its support for the UK’s growing cryptoasset sector, saying it would move forward with ambitious regulatory plans. It said the aim is to foster innovation in the industry while keeping consumers protected.
According to a report by IG Group, the UK crypto market is projected to experience a growth of up to 20% in the future since the relaunch of the ETNs. The analysis found that 30 percent of UK adults would invest in crypto through ETNs, as an additional system of regulatory control would inspire them and make the practice seem safe.
According to the latest FCA data, 12% of UK adults own crypto assets, whereas IG (survey) estimates ownership to be 25%. The participation in the new regulatory environment may be greatly extended, making the UK a major centre of investment with all the digital assets properly laid out.
