The UK’s monetary regulator has lifted a ban on crypto exchange-traded notes (cETNs) for retail traders in a transfer welcomed by trade leaders as a step towards aligning the nation with world crypto markets and strengthening its place as a digital asset hub.
On Friday, the UK’s Monetary Conduct Authority (FCA) reversed the ban on retail entry to cETNs, with regulatory modifications taking impact from Oct. 8. The ban was enforced in January 2021, citing excessive volatility and “lack of professional funding want.”
The cETN ban reversal displays a change within the regulator’s method to crypto property. In a press release, an FCA govt stated the choice displays how the market has developed and the way crypto-related merchandise at the moment are higher understood.
With the FCA lifting the ban, onlookers and trade stakeholders shared their ideas on the event. Some hailed the transfer as a step towards progress, whereas others criticized the UK utilizing satire.
Group reacts to FCA lifting the ban on crypto ETNs
“We’re delighted to see this reversal,” stated Ian Taylor, board adviser at CryptoUK and chief working officer of HT Digital. “Till now, the UK has been an outlier on ETNs. This transformation displays the progress we’ve made towards introducing a extra proportionate method to shopper threat.”
Taylor informed Cointelegraph that CryptoUK, a commerce affiliation for the digital asset trade, has been lobbying for extra inclusive entry to regulated merchandise like ETNs, which observe the efficiency of crypto property with out requiring direct possession.
Riccardo Tordera, the director of coverage and authorities relations on the UK-based funds trade physique, The Funds Affiliation, echoed Taylor’s optimism:
“The intrinsic nature of crypto means it may be accessed by everybody, from all over the place. The FCA ban on retail entry to sure crypto merchandise was hindering the UK’s possibilities of changing into a worldwide crypto hub.”
Tordera informed Cointelegraph that the FCA’s resolution permits people to “make their very own selections at their very own threat.”
He stated proscribing entry to the cETNs places the UK at an obstacle, undermining its world competitiveness.
“This can be a welcome transfer,” he added. “The FCA ban was extraordinarily protecting and was already smoothed when skilled traders had been allowed entry final 12 months.”
Whereas some welcomed the transfer, skeptics additionally chimed in. WallStreetBets founder Jaime Rogozinski summed up the second with sarcasm, saying, “Britain loves monetary threat—simply not the sort that includes, say, greens or an industrial coverage.”
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Crypto derivatives stay banned
Whereas the FCA reversed its ban on cETNs, the regulator clarified that crypto derivatives are nonetheless prohibited.
“The FCA’s ban on retail entry to crypto asset derivatives will stay in place,” the FCA stated on Friday.
Crypto derivatives embody futures, choices and perpetual contracts. The regulator added that it’ll monitor market developments and think about its method to high-risk investments.
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