UK to Consider Lifting Ban on Retail Access to Crypto Exchange-Traded Notes

The UK’s financial watchdog is reconsidering its
approach to crypto investments by proposing to lift the ban on retail access to
crypto exchange-traded notes (cETNs).

This shift signals a growing openness to integrating
these products into mainstream markets, potentially increasing competition and
choice for UK investors. The change would allow individual consumers to buy
crypto ETNs on FCA-approved exchanges, a move that other countries have already adopted.

A New Chapter for Crypto ETNs in the UK

Currently, crypto ETNs remain restricted to
professional investors in the UK. The FCA’s proposal would allow retail investors to trade these products through recognised investment exchanges under
strict regulatory safeguards.

Consumers would receive clear information about the
risks involved, aligning promotional rules with those applied to direct crypto asset
purchases.“This consultation demonstrates our commitment to
supporting the growth and competitiveness of the UK’s crypto industry,” the
regulator noted.

“We want to rebalance our approach to risk, and lifting
the ban would allow people to make the choice on whether such a high-risk
investment is right for them, given they could lose all their money,” the regulator added.

Read more: After Circle’s IPO, Crypto Exchange Gemini Takes Next Step Toward Listing With SEC Filing

While the FCA is easing restrictions on crypto ETNs,
it remains cautious. The ban on retail access to crypto asset derivatives will
stay in effect for now. The regulator continues to monitor developments closely
and maintains a firm stance on high-risk investments to protect consumers.

This proposal is part of the FCA’s broader effort to
build a comprehensive regulatory framework for crypto assets. It follows recent
consultations on stablecoins and other regulatory measures aimed at providing
clarity and fostering responsible growth within the crypto sector.

Supporting Growth Beyond Crypto

The FCA also outlined additional proposals in its
latest quarterly consultation paper to reduce regulatory burdens across the
financial sector.

These include simplifying reporting requirements for
funds’ assessments of value, which is expected to save costs for nearly 150 firms
managing thousands of funds, and cutting unnecessary data reporting that
affects most firms. These steps highlight the FCA’s dual focus:
encouraging innovation and market development while maintaining investor protections.

This article was written by Jared Kirui at www.financemagnates.com.



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