The UK’s Monetary Conduct Authority (FCA) has lifted the ban on retail entry to cryptocurrency exchange-traded notes (cETNs).
Firms within the UK will quickly be capable to supply retail shoppers cETNs, with regulatory adjustments efficient Oct. 8, based on an FCA announcement on Friday.
The brand new growth within the UK’s regulatory strategy on crypto comes after the FCA banned crypto ETNs in January 2021, citing the acute volatility of crypto property and a “lack of legit funding want” for retail shoppers.
“Since we restricted retail entry to cETNs, the market has developed, and merchandise have grow to be extra mainstream and higher understood,” David Geale, FCA govt director of funds and digital finance, mentioned within the announcement.
What are crypto ETNs?
Not like cryptocurrency exchange-traded funds (ETFs), which observe the worth of underlying property like Bitcoin (BTC) in custody, crypto ETNs aren’t backed by any underlying property and signify debt securities.
“As a substitute of fairness within the fund, every traded be aware of an ETN represents an obligation from a authorized entity holding the underlying asset as collateral,” based on the ETN description by the Austrian crypto buying and selling platform Bitpanda.
By investing via an ETN monitoring crypto, traders can acquire publicity to bodily crypto property by way of their common brokers or banks.
ETNs are related to dangers like restricted management over their property, which underscores the significance of buying ETNs from respected establishments to make sure security, Bitpanda mentioned.
Crypto derivatives nonetheless banned
Whereas permitting crypto ETNs, the UK FCA is but to decide on whether or not to permit retail traders to entry crypto derivatives, which the authority banned alongside ETNs in 2021.
“The FCA will proceed to observe market developments and think about its strategy to high-risk investments,” the regulator said.
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Crypto derivatives, or merchandise equivalent to crypto futures, choices and perpetual contracts, have proven resilience within the second quarter of 2025, with volumes netting $20.2 trillion, based on the crypto analytics platform TokenInsight.
In distinction, centralized exchanges’ (CEXs) volumes plummeted by 22%, displaying a giant distinction to cryptocurrency ETFs.
US permits in-kind for crypto ETFs: No impression on retail
Cryptocurrency ETFs have seen outstanding progress since their historic launch within the US in 2024, with issuers like BlackRock posting a 370% surge in inflows in Q2 2025 and crypto funds breaking a number of data.
On Tuesday, the US Securities and Trade Fee (SEC) delivered one other essential resolution on crypto ETFs, authorizing issuers to proceed with in-kind creations and redemptions or to trade ETF shares for the underlying crypto property.
Though the transfer is essentially seen as massive information for the crypto trade, ETF analysts like Eric Balchunas say that the occasion will seemingly have little to no impression on retail traders.
“It’s not a huge effect to retail however extra of a plumbing repair. It simply makes the pipes a little bit higher,” Balchunas mentioned in an X publish on Tuesday. The most important takeaway from the milestones is that the SEC is able to deal with crypto like a legit asset class, he added.
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