The UK’s Financial Conduct Authority (FCA) has put forward plans to reverse its January 2021 prohibition on retail investors buying crypto-linked exchange-traded notes (ETNs). These notes mirror the price of cryptocurrencies such as Bitcoin and Ethereum but are packaged as debt securities traded on stock exchanges.
What is Changing and What Remains
The FCA’s proposal removes the retail ban, allowing consumers to purchase ETNs—if they are listed on FCA-approved exchanges—subject to strict “financial promotion” rules. These rules mandate clear risk warnings and prohibit incentives that could mislead or pressure consumers. The consultation runs through July 2025.
However, the FCA is retaining its ban on crypto derivatives and exchange-traded funds (ETFs) for retail investors, stating it will continue to monitor the market before making further changes.
This shift aligns with global efforts—particularly from the US, under a pro-industry Trump administration—to attract crypto capital. With Bitcoin prices surging nearly 50%, partly driven by expectations of relaxed regulatory policies, the UK risks falling behind without updating its own rules. In fact, ETNs and ETFs in the US now manage over $130 billion in assets, dwarfing Europe’s offerings.
UK Chancellor Rachel Reeves has also signaled a move toward stronger crypto oversight and US cooperation, aligning Treasury priorities with the FCA’s regulatory pivot.
Industry Reaction
The crypto community responded positively. Bivu Das, Kraken’s UK GM, praised the move as recognition of market maturity and said outdated rules no longer fit today’s landscape.
Consultancy Capco noted that the decision expands consumer choice and boosts the UK’s goal to be a digital-asset leader. The caveat: consumer education and structured safeguards must accompany this access.
Consumer Protection Kept Front and Centre
FCA Executive Director David Geale stressed that while retail access increases, so does the emphasis on risk awareness.
“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 also reminded consumers that ETN investments would not be covered by the official compensation scheme should a provider collapse.
The consultation is part of a wider FCA effort—including stablecoin rules, custody standards, and potential new enforcement powers—aimed at building a robust crypto regulation framework.
Meanwhile, concerns linger. The UK is not only competing with the US, but also with fast‑moving crypto centres in Dubai and Abu Dhabi .
My take: Measured Opening, Not Full Embrace
This move by the FCA is a cautious yet smart step toward normalising crypto investments in the UK. Allowing retail ETNs shows the regulator is conceding that crypto is no longer fringe—but not yet mainstream. By retaining bans on crypto derivatives and ETFs, the FCA draws a clear line: it won’t rush into full crypto adoption without ensuring public safety and maturity in market infrastructure.
The emphasis on financial promotions, risk disclosures, and limiting providers to approved exchanges reflects an understanding that education and structure matter as much as access.
At the same time, UK policy must keep pace. With global crypto capitals eating into London’s share, regulatory acceleration—without recklessness—is critical. Lifting the retail ban on ETNs is the first page; the FCA and Treasury now must write the rest of the playbook to maintain credibility and competitiveness.
