Financial Regulatory Authority (FCA) may consider lifting restriction on cryptocurrency Exchange-Traded Notes (ETNs) for individual investors in the UK.

Financial Regulatory Authority (FCA) may consider lifting restriction on cryptocurrency Exchange-Traded Notes (ETNs) for individual investors in the UK.

Unleashing the Crypto markets: FCA deliberates over lifting the ban on retail cryptocurrency ETNs

The Financial Conduct Authority (FCA), the UK's financial regulatory body, is poised to open up the crypto markets to retail investors by proposing to lift the ban on crypto Exchange-traded notes (ETNs) sales. This potential move, announced on June 6, 2025, marks a significant milestone for the UK's digital asset market.

ETNs, akin to Exchange-traded funds (ETFs), are debt instruments that mirror the performance of a specific asset, such as a cryptocurrency (like Bitcoin). While professional investors have been buying these in the UK, individual investors have been barred since 2021. However, the FCA's decision may change this, provided the crypto ETN is traded on a recognized investment exchange approved by the agency.

Furthermore, the sale of crypto ETNs would be subject to financial promotion regulations, ensuring customers are well-informed about the inherent risks associated with these investments and protected from misleading sales.

Russell Barlow, CEO of 21Shares, lauded the proposal, stating, "This is a landmark moment for the UK digital asset market." Barlow is optimistic about the move, stating that the FCA's decision heralds a regulated path for retail investors to crypto markets.

Interestingly, Bitcoin prices have seen impressive growth, hitting $100,000 for the first time in December 2024 and achieving new all-time highs in 2025. The FCA's proposed crypto ETN sales could enable retail investors to capitalize on this momentum.

Reflecting the FCA's commitment to its crypto regulation roadmap, this proposal emphasizes a balanced approach to risk management, innovation, and market integrity. David Geale, the FCA's Executive Director of Payments and Digital Finance, said, "We want to rebalance our approach to risk, and lifting the ban would allow people to make an informed decision about whether such a high-risk investment is suitable for them, given they could lose all their money."

The FCA is also considering the potential issuance of stablecoins, crypto assets pegged to fiat currencies, and seeking the Bank of England's input as it creates a stablecoin regime. Stablecoins are intended to help stabilize crypto's value by reducing volatility.

UK investors may already have some exposure to crypto price movements through alternative investments, such as stocks tied to cryptocurrencies, like MicroStrategy. However, given the inherent volatility of these assets, potential investors should proceed with caution.

For less volatile alternatives, investors could consider crypto-related ETFs like the Invesco CoinShares Global Blockchain UCITS ETF (LON:BCHN). This ETF invests in crypto-related stocks and companies utilizing blockchain technology, such as MicroStrategy and Coinbase, offering exposure to crypto's market movements while minimizing volatility.

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The FCA's proposal to lift the ban on crypto ETNs indicates a regulated path for retail investors to invest in cryptocurrencies like Bitcoin, potentially allowing them to capitalize on the impressive growth seen in the crypto market. Given the inherent volatility of these assets, investors should temper their enthusiasm and approach with caution. For those seeking less volatile alternatives, consider crypto-related ETFs, such as the Invesco CoinShares Global Blockchain UCITS ETF, which invests in stocks tied to cryptocurrencies and blockchain companies, offering exposure to the crypto market while minimizing volatility.

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