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06/10 09:20

FCA considers opening crypto ETNs to UK retail inv

FCA considers opening crypto ETNs to UK retail investors

Retail investors in the UK may soon gain access to crypto exchange-traded notes (ETNs) as the Financial Conduct Authority considers lifting a three-year ban.

The potential policy change would allow individuals, not just institutions, to invest in crypto-linked ETNs listed on approved UK exchanges.

This review is part of the FCA’s latest consultation aimed at increasing competition in the market and easing the regulatory burden. While retail investors have long been excluded from these products due to risk concerns, the regulator now appears more willing to let individuals decide for themselves, provided safeguards are in place.

Unlike spot ETFs, ETNs do not hold cryptocurrencies directly. Instead, they are unsecured debt instruments linked to the performance of assets. Expanding them to retail markets would bring the UK into line with jurisdictions such as the US and EU, where such products are already more accessible.

 UK CEO Bivu Das described the proposal as a turning point, arguing that the market had matured and there was no longer a need for blanket restrictions. one of the largest FCA-registered platforms, believes that wider access must be accompanied by robust investor education and clear disclosure.

Although crypto ETNs were allowed for institutional trading in the UK earlier this year, they have been adopted to a limited extent. Wider availability could change that. However, the FCA stressed that the ban on derivatives for individuals will remain in place, and any new rules will be accompanied by strict financial promotion standards to ensure consumer protection.

Comprehensive legislation covering stablecoins, staking and custody is still being developed, with full implementation expected by 2026. While no date has been set for a final decision, the FCA’s latest move is a sign of growing openness to integrating cryptocurrencies into the mainstream investment landscape.

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