The United Kingdom has taken a step towards turning into Europe's digital assets hub, announcing the lifting of a decades-long ban on retail access to crypto exchange-traded notes (ETNs) and ETFs.
On June 6, the Financial Conduct Authority (FCA) confirmed that it will allow individual investors to buy these sanctioned crypto products, previously only open to professionals on sanctioned investment exchanges like the London Stock Exchange.
The policy shift, overturning a ban that's been on the books since 2019, forms part of a broader post-Brexit strategy to boost competitiveness and attract fintech innovation.
Crypto ETNs and ETFs tracking the value of assets like Bitcoin and Ethereum will be available to retail buyers if they're traded on FCA-listed venues and in accordance with strict financial promotion and risk disclosure rules.
Despite this, the retail crypto derivatives ban continues to stand, mirroring concerns regarding volatility and consumer protection in the marketplace.
David Geale, the FCA's executive director of payments and digital assets, was keen to note the regulator's new stance:
"We want to rebalance our approach to risk, and lifting the ban would allow people to make their own decision on whether such a high-risk investment was right for them, in the context of the fact that they might lose all their money."
The industry leaders welcomed the move as a signal that Britain is "open for crypto," with Bivu Das of Kraken UK labelling it a "major milestone" and a sign that old restrictions no longer serve their function.
The new products that have been authorized are crypto ETNs and ETFs on Bitcoin, Ethereum, and other major tokens, under FCA standards and being traded on authorized exchanges.
This means British investors can now include digital assets in traditional investment portfolios, without the need to go to offshore or unregulated platforms. It is predicted by analysts that this will trigger significant inflows into UK-listed crypto funds, aligning with US, EU, and Hong Kong.
Industry reaction has been swift and generally positive.
Ian Taylor of CryptoUK termed the action as "welcome a move by the FCA, acknowledging that the market has matured significantly."
Laurent Kssis of CEC Capital further added the update will help to replace the previous over-reliance on offshore exchanges, while Duncan Moir of 21Shares believes it will "enhance legitimacy and increase allocations from traditional financial institutions.".
However, the UK's new regime does have robust safeguards. The FCA will require clear risk warnings, ban inappropriate marketing incentives, and monitor the market for signs of consumer harm.
The government's wider crypto regulation overhaul, introducing as early as 2026, will place exchanges, custodians, and brokers in line with traditional finance — ushering in a new era of due diligence and institutional gravitas.
Adoption of crypto in the UK is already in progress, with ownership levels doubling to 12% in 2024 from 4% in 2021. As London rivals as a potential hub for Europe's crypto market, removal of the ETN prohibition is considered an action of utmost significance to bring in retail investors and overseas fintech entrants.
The FCA's evolving stance is also set to trigger further innovation in stablecoins, DeFi, and tokenized securities, making the UK competitive again as the EU's MiCA regime comes into force.
