Key Takeaways
- The U.K. FCA is considering lifting the ban on crypto ETNs for retail investors after five years.
- Crypto ETNs are similar to ETFs but don’t hold the underlying asset; they track its performance.
- FCA’s decision to lift the ETN ban is seen as a progressive move.
After years of ban, the United Kingdom’s financial regulator has finally agreed to allow retail customers to access crypto-based investment products.
The U.K.’s financial watchdog is considering proposals that would allow investors in the country to purchase bitcoin and other cryptocurrencies through inexpensive ETF-style investment products shortly.
FCA To Remove 5-Year ETN Ban
In 2020, the FCA banned the sale of Bitcoin and other crypto ETNs to U.K. retail investors alongside crypto derivatives, arguing that they were inappropriate and high-risk investments.
In a June 6 announcement, the FCA said the proposed changes would allow individual consumers to access crypto ETNs if listed on an FCA-recognized investment exchange.
“We want to rebalance our approach to risk, and lifting the ban would allow people to choose whether such a high-risk investment is right for them, given they could lose all their money,” said David Geale, executive director of payments and digital assets at the FCA.
Crypto ETNs, like Crypto ETFs, are crypto-based investment products. The only difference is that ETFs are essentially funds that hold the underlying assets of the index, while ETNs are debt securities issued by a financial firm.
U.K. Finally Warming Up to Crypto
Although the derivatives ban remains intact, the government wants to regulate the crypto market more efficiently amid a growing adoption spree.
The U.K. FCA is known for its conservative regulatory approach towards crypto, but with the latest decision to lift the ban on crypto ETNs.
These ETNs have only been available to institutional investors.
At a time when the United States has gone all-in on crypto thanks to Donald Trump’s pro-crypto stance, while Russia, UAE, and even regulatory conservative nations such as Pakistan and, to some extent, South Korea have also warmed up to crypto, the U.K. cannot lag far behind.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
