The UK’s leading financial regulator is taking a notable step forward. The Financial Conduct Authority (FCA) plans to remove its ban on cryptocurrency exchange-traded notes (ETNs) applicable to retail investors. After years of a restrictive approach, it seems the FCA is beginning to open the door for regulated crypto investment through traditional brokers.
ETNs: The Middle Ground for Crypto Curious
Crypto ETNs offer a means to invest in digital currencies like Bitcoin via conventional stock markets, eliminating the need for wallets and the risks of losing access codes. They provide a less direct way for investors to benefit from cryptocurrency price movements.
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JUST IN: 🇬🇧 UK regulator FCA to lift ban on cryptocurrency Exchange Traded Notes (ETNs) for retail investors.
— Whale Insider (@WhaleInsider) June 6, 2025
These ETNs are not a new concept globally, with firms like 21Shares and VanEck already succeeding in other markets. The FCA had previously dismissed such ventures in the UK as risky and overly complicated.
What’s Changed?
The authority now acknowledges that the market for cryptocurrencies has matured, citing the development of greater structure, transparency, and demand for safer investment vehicles among retail investors.
In a recent consultation document, the FCA opened the floor for feedback about lifting the ban, albeit still cautioning against reckless investments in volatile cryptocurrencies.
Will You Be Able to Buy Crypto ETNs Tomorrow?
The possibility of purchasing ETNs immediately is slim. Currently, the FCA is in a consultation phase and will be gathering opinions until July. Should they proceed, new regulations are expected to include stringent risk warnings and limited access to these products.
Why It Matters for the UK
This development extends beyond just ETNs; it reflects the UK’s ambition to secure a prominent position in the global crypto landscape. With ongoing discussions about transforming the UK into a crypto-friendly environment, lifting the ETN ban may be an initial stride in this direction.
What Could Go Wrong?
Investors should remain cautious as cryptocurrency markets can be unpredictable. There are risks associated with ETNs as well, such as potential issuer collapses or market crashes that could affect retail investors.
Final Word
The UK isn’t completely unrolling the welcome mat for cryptocurrency just yet, but incremental changes signify a more open approach. If the FCA takes these steps, it could herald a new era where crypto is recognized as a viable component of financial investment strategies, moving away from its prior stance as a plain threat.
Key Takeaways:
- The FCA indicates a potential reversal of its 2021 prohibition on crypto ETNs for retail investors, signifying a shift in its regulatory outlook.
- Crypto ETNs facilitate investment in digital currencies like Bitcoin through regulated platforms, without actual possession of the assets.
- The ongoing proposal is in a consultation stage, potentially accompanied by strict risk disclosures to protect retail investors.
- This move aligns with the UK’s broader objective to become a crypto-friendly financial hub while maintaining strong investor safeguards.
