Crypto ETNs Could Make a Come-back for UK Retail Investors: Bold New Proposal from the FCA
Taking a prudent, forward-looking course, the UK’s Financial Conduct Authority (FCA) is blazing a bold new trail in cryptocurrency regulation. On 6 June, the FCA announced a proposal to withdraw its 2021 ban on crypto exchange-traded notes (ETNs) for retail investors—a step that could dramatically alter how everyday investors interact with digital assets in the UK.
What’s Behind the Shift? A Movement Toward Innovation
In 2021, the FCA barred retail users from crypto ETNs and related derivatives owing to their pronounced volatility and vulnerability to market manipulation. Yet in a dramatic reversal, the FCA now recognises the market’s continued evolution.
“The aim is to bring our risk framework into balance,” said David Geale, Executive Director of Payments and Digital Finance at the FCA.
Lifting the prohibition would let individuals decide for themselves whether a risk of that magnitude is suitable for them, since they may risk losing every penny.
The shift supports the UK government’s wider ambition to establish itself as a global centre for crypto innovation, led by Prime Minister Rishi Sunak.
What Are Crypto ETNs?
Crypto ETNs constitute debt instruments that mirror the performance of cryptocurrencies such as Bitcoin and Ethereum. In contrast to owning cryptocurrency outright, ETNs grant investors exposure without requiring them to set up wallets or manage private keys.
The investment vehicles are already accessible to investors in the EU and US, while demand for regulatory-compliant crypto products continues to climb.
How Will the Revised Rules Take Shape?
Should the proposal be endorsed, crypto ETNs would be permitted solely on Recognised Investment Exchanges (RIEs) such as the London Stock Exchange. Additionally:
- Entities that issue ETNs must comply with stringent financial promotion rules.
- Any form of gimmicky marketing or misleading advertising will not be allowed.
- Every proposition must display plain-language warnings about the associated risks.
In turn, retail investors are made aware of what they are buying, a safeguard that parallels the protections directly afforded to cryptocurrency trading.
“This is a step in the right direction for UK crypto policy,” noted a digital asset fund manager. “It gives investors more choice and shows the FCA is willing to adapt to a changing market.”
An Appreciated Step for the Industry
Leading figures throughout the crypto and fintech sectors are welcoming the proposal.
A digital asset fund manager observed that the proposal is a positive advance for UK crypto policy. It expands investor choices while demonstrating that the FCA is prepared to adjust to a changing marketplace.
The FCA’s consultation stays open until the year’s end, with an anticipated final ruling scheduled for early 2026. Subject to approval, retail investors may soon re-enter a crypto investment option praised for its convenience—all within a transparent, strictly regulated framework.
Heightening Access to Crypto While Maintaining Safety
The FCA’s proposal delivers a measured and thoughtful strategy for the adoption of crypto. It acknowledges researchers’ escalating interest in digital assets, all the while underscoring robust safeguards and clear guidance.
As the UK advances to the vanguard of cryptoasset regulation and innovation, the step could prove decisive—for the UK and for crypto market standards across the globe.