Companies weigh in as UK prepares to reverse crypto ETN ban
News Summary
The UK's Financial Conduct Authority (FCA) is set to lift its ban on retail investors accessing crypto Exchange-Traded Notes (ETNs) starting October 8, 2025. These ETNs must be traded on FCA-approved, UK-based investment exchanges. However, the FCA maintains its ban on retail access to crypto Exchange-Traded Funds (ETFs), citing the need for updates to its current regulatory framework. This development has prompted responses from various companies; BlackRock is reportedly exploring ways to offer its iShares Bitcoin ETP. Bitwise CEO Hunter Horsley expressed excitement about serving more investors in their European home market. Nevertheless, retail investors might face delays of up to a week before trading can commence, partly because the FCA only began accepting prospectuses on September 23. This contrasts with the US, where spot cryptocurrency-tied ETFs were approved in January 2024, although the SEC's ability to review new crypto ETFs is currently limited by a lack of government funding.
Background
The UK FCA imposed a ban on crypto ETNs for retail investors in 2019, citing concerns over consumer protection from risks associated with these products. Unlike ETFs, ETNs represent debt securities tied to crypto and are not backed by any underlying assets. This lifting of the ban marks a more open, yet still cautious, approach by the UK to digital asset regulation. Previously, the US Securities and Exchange Commission approved spot Bitcoin ETFs in January 2024, positioning the US market ahead in retail crypto product offerings and creating a contrasting environment for global regulators.
In-Depth AI Insights
Why is the UK selectively lifting the ETN ban but maintaining the ETF ban, and what does this signal about its deeper digital asset strategy? - The FCA's move likely reflects a pragmatic, tiered risk regulatory strategy. ETNs, as debt instruments, may fit more readily into existing legal and regulatory frameworks compared to direct crypto asset ETFs, which would require updates to the fund framework. This suggests the FCA is seeking a cautious balance between fostering market innovation and maintaining financial stability and consumer protection. - This