The UK’s Financial Conduct Authority (FCA) is proposing to lift its six‑year ban on retail investors purchasing crypto exchange-traded notes (ETNs), which track cryptocurrency prices without requiring direct ownership—bringing the UK in line with markets like Germany and Switzerland (source [1]).
What’s Changing?
Since 2021, retail investors in the UK have been banned from buying crypto ETNs due to concerns over protection and risk. The FCA’s draft proposal, now open for consultation until July 7, 2025, seeks to allow sales of ETNs to retail investors, provided they are listed on FCA-approved exchanges and accompanied by standardized financial promotion rules (source [1]).
Market Reaction & Expert Opinion
Industry experts see this as a long-awaited but modest step forward:
- Kenneth Lamont (Morningstar) cautions that the move merely aligns the UK with its EU peers and falls short of establishing a global crypto hub (source [2]).
- Hector McNeil (HANetf) praises the change, expecting it to boost competition and liquidity by enabling more broker platforms to offer crypto products (source [2]).
- Menno Martens (VanEck) and Matt Tagliani (Invesco) warn that late market entry could hinder the UK’s ability to overtake existing EU/US markets in crypto product offerings (source [2]).
Retail vs Professional Markets
- Only ETNs—crypto derivatives will remain off-limits to retail investors.
- All ETNs must be traded on regulated FCA-approved exchanges.
- Strict risk warnings and disclosures will be mandated to protect investors.
Will It Make a Difference?
This regulatory update signals a step towards global alignment and consumer access. However, considering that UK retailers already access EU and US crypto products, the real impact may be incremental rather than transformative.
Sources
