The UK Financial Conduct Authority (FCA) has officially lifted its four-year ban on retail access to crypto exchange‑traded notes (cETNs), allowing individual investors to gain exposure to bitcoin and other digital assets through regulated exchanges for the first time since 2021.
The decision, effective today, enables firms to offer crypto ETNs to retail investors on FCA‑approved investment exchanges such as the London Stock Exchange and Cboe UK. The move signals a more open, though still cautious, stance toward crypto as the UK advances its broader digital‑asset regulatory roadmap.
“Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood. In light of this, we’re providing consumers with more choice, while ensuring there are protections in place,”
said David Geale, Executive Director of Payments and Digital Finance at the FCA.
How crypto ETNs fit into regulated investing
Crypto ETNs are debt instruments issued by financial institutions that track the price of an underlying cryptocurrency such as bitcoin or ether, minus management fees. They are traded like securities and do not require investors to hold digital assets directly.
While similar to exchange‑traded funds (ETFs), ETNs differ in structure and risk profile, offering an alternative for investors seeking exposure to crypto within familiar, regulated markets.
The FCA’s updated rules require that all cETNs available to retail investors be traded on UK‑based Recognised Investment Exchanges (RIEs) and comply with financial‑promotion and consumer‑duty requirements, ensuring firms provide clear, risk‑appropriate information.
However, the FCA reiterated that these products will not be covered by the Financial Services Compensation Scheme (FSCS), meaning consumers must understand potential risks before investing. The ban on crypto‑asset derivatives for retail remains in place.
Market reaction and potential growth
Research from IG Group indicates that the UK crypto market could expand by up to 20% following retail access to ETNs. Nearly a third of UK adults said they would consider investing in crypto through ETNs, with interest strongest among the 18‑to‑34 age group.
“Crypto ETNs represent a significant step forward for the UK market, opening access to millions of investors who have previously been cautious or excluded,”
said Michael Healy, IG’s UK Managing Director.
“The ability to hold crypto within familiar, tax‑efficient vehicles like ISAs and pensions is a real milestone.”
Industry participants view the FCA’s move as a long‑awaited turning point for the City’s ambition to become a global crypto hub, bringing it closer to jurisdictions like the U.S., Canada, Hong Kong, and the European Union, where regulated crypto products are already available.
“Allowing retail investors to gain exposure through UK‑recognised exchanges keeps this activity within the regulatory perimeter, rather than pushing consumers offshore to less regulated environments,”
said Mark Aruliah, Head of EMEA Policy and Regulatory Affairs at Elliptic, speaking to The Block.
From restriction to reform
The FCA first prohibited retail sales of crypto derivatives and ETNs in January 2021, citing volatility and investor‑protection concerns. Partial access for professional investors followed in March 2024, when the regulator allowed 21Shares, WisdomTree, and Invesco to list the first bitcoin‑ and ether‑backed ETNs on the London Stock Exchange.
In June 2025, after industry consultation and policy review, the regulator confirmed its plans to reverse the ban for retail clients, a process now completed.
Legal analysts say the decision marks a pragmatic adjustment.
“Today’s decision recognizes that crypto ETNs are the safest and most sensible route for retail exposure to digital assets,” said Brett Hillis, partner and crypto‑regulation expert at Reed Smith LLP.
“Looking ahead, I don’t expect the FCA to remove restrictions on derivatives anytime soon, but this is a big step toward responsible participation.”
Inclusion in tax-efficient accounts
In coordination with today’s rule change, the UK government also confirmed that crypto ETNs can now be held in registered pension schemes, and will be eligible for Stocks and Shares Individual Savings Accounts (ISAs) from April 2026.
Officials described the policy as part of efforts to integrate “innovative asset classes” into mainstream financial planning while maintaining robust safeguards.
The UK’s vast ISA and SIPP market, holding more than £730 billion (US $930 billion) in assets, could channel significant capital into regulated crypto investments if adoption widens.
“The UK has the potential to become Europe’s largest crypto market, particularly if eligibility for ISAs and SIPPs is confirmed,”
said Dan Gold, founder of fintech platform Stratiphy, in remarks to DL News.
Toward a comprehensive crypto regime
The FCA’s decision aligns with the government’s ongoing plan to build a unified regulatory framework covering stablecoins, staking, trading venues, custody, and lending, expected to be implemented in 2026.
Lawmakers describe the ETN policy as a “measured reopening” designed to balance innovation with consumer protection. Industry leaders, however, continue to call for the authorization of crypto ETFs, which remain prohibited.
“ETNs are just one part of the puzzle,” Healy of IG said. “The UK needs a proper regulatory framework , and it needs it fast or we risk falling behind global peers.”
Outlook
Analysts anticipate that the reopening of the retail crypto ETN market will attract both new entrants and traditional investors seeking regulated exposure to digital assets, boosting trading volumes across UK exchanges within months.
While sentiment remains cautiously optimistic, regulators emphasize that crypto remains a high‑risk investment and that consumers should invest only what they can afford to lose.
The FCA said it will continue monitoring market developments and adjust measures “as necessary to maintain fair, orderly, and transparent markets.”
Anastasiia G
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