UK Lifts Ban on Retail Access to Crypto ETNs: Bitcoin, Ethereum Exposure Now Regulated
The UK's Financial Conduct Authority (FCA) has lifted its ban on retail access to crypto exchange-traded notes (cETNs), enabling retail investors to gain exposure to Bitcoin and Ethereum through regulated products. This move, which comes into effect immediately, is expected to bring significant changes to the UK's financial landscape.
21Shares, a global provider of crypto products, is partnering with the British wealth management app Stratiphy to offer physically-backed Bitcoin and Ethereum ETNs. Both companies have extensive experience in the crypto sector, with 21Shares boasting over seven years of market experience and Stratiphy becoming the first UK wealth manager to offer these products under the newly lifted FCA rules.
Russell Barlow, CEO of 21Shares, views this development as a significant step towards embracing innovation in the UK's financial sector. However, investors are advised to understand the quality of issuers, transparency, and disclosures regarding cETN products. Nick Jones, founder and CEO of Zumo, welcomes the development but cautions that cETNs are debt securities.
Previously, access to cETNs was limited due to listing requirements, and the ban on retail access to crypto derivatives remained in place. Now, these ETNs may be eligible for inclusion in Individual Savings Account (ISA) and Self-Invested Personal Pension (SIPP) portfolios, offering tax-efficient cryptoasset exposure. However, providers must clearly communicate the risks and protections associated with cETN investments to consumers to prevent misjudgments.
The lifting of the ban on retail access to crypto ETNs in the UK opens up new investment opportunities for retail investors, allowing them to gain exposure to Bitcoin and Ethereum through regulated products. As the industry moves forward, it is crucial for providers to act in the spirit of the Consumer Duty, ensuring consumers are well-informed and protected.
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