The United Kingdom has just reversed its policy four-year ban on crypto exchange-traded notes, admitting that the market is mature enough for retail investors to safely access these products. The Financial Conduct Authority announced on Wednesday that UK residents can now purchase crypto ETNs through FCA-approved exchanges.
Crypto ETNs are debt products that provide investors with exposure to cryptocurrencies without actually owning them. The underlying crypto is held by regulated custodians while the notes trade like ordinary securities on an exchange.
David Geale of the FCA said the market has evolved significantly since 2021 when they initially banned these products, saying they posed too much harm and had no legitimate investment purpose. This position has completely changed as the government has gradually shifted its focus to crypto over the past few years.
From October 8, crypto ETNs will be able to be held in registered retirement plans, and from April 2026, they will be permitted in individual savings accounts, providing citizens with tax-efficient options for crypto exposure.
IG Group Research predicts that the UK crypto market could explode by 20% following this change. Their study found that 30% of UK adults would consider investing in crypto via ETNs, attracted by the perceived security and regulatory oversight. Current cryptocurrency ownership is between 12 and 25%, according to the study.
THE FCA clarified that while lifting the ban on ETNs, they maintain restrictions on crypto derivatives for retail investors.
Conclusion
The UK has lifted a four-year ban on crypto ETNs, citing market maturation, allowing retail access through FCA-approved exchanges, with analysts forecasting market growth of 20% thanks to the policy change.
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