UK FCA Reopens Doors to Crypto ETNs for Retail Investors
The UK’s Financial Conduct Authority (FCA) has taken a major step by lifting the restriction on retail access to cryptocurrency exchange-traded notes (cETNs). This decision, announced last Friday, will allow corporations within the UK to supply these products to retail consumers starting October 8.
A Shift in Regulatory Stance on Crypto
Back in January 2021, the FCA banned crypto ETNs citing the unpredictable nature of crypto assets and the perceived absence of a “legitimate investment need” for retail consumers. However, the landscape has modified since then. “The market has evolved, and products have become more mainstream and better understood,” explained David Geale, FCA’s executive director of payments and digital finance.
Understanding Crypto ETNs
Crypto ETNs differ from cryptocurrency exchange-traded funds (ETFs) in a number of key ways. Unlike ETFs, which hold assets like Bitcoin in custody, ETNs are essentially debt securities and should not backed by any underlying assets. Instead, each ETN represents an obligation from a legal entity that holds the underlying assets as collateral, in keeping with Bitpanda, an Austrian crypto trading platform.
Investors seeking to dip their toes into the crypto world can access these assets through ETNs via their regular brokers or banks. However, Bitpanda warns of risks like limited control over these assets, emphasizing the importance of buying from reputable sources to make sure safety.
What’s Still Off the Table?
Despite the green light for crypto ETNs, the FCA stays cautious about crypto derivatives. The authority, which banned them alongside ETNs in 2021, is yet to make a decision on permitting retail investors to access these high-risk products. “The FCA will continue to monitor market developments and consider its approach to high-risk investments,” the regulator stated.
Interestingly, crypto derivatives have shown resilience, with volumes reaching $20.2 trillion within the second quarter of 2025, in keeping with TokenInsight. This stands in stark contrast to the declining volumes of centralized exchanges.
Across the Pond: US Developments in Crypto ETFs
On the opposite side of the Atlantic, cryptocurrency ETFs have been making waves since their debut within the US in 2024. Major players like BlackRock have seen a 370% surge in inflows by Q2 2025, breaking multiple records. Recently, the US SEC approved in-kind creations and redemptions for crypto ETFs, allowing issuers to exchange shares for the underlying crypto assets.
While this move is seen as a positive development for the crypto industry, experts like Eric Balchunas consider it won’t significantly impact retail investors. “It’s not a huge impact to retail but more of a plumbing fix. It just makes the pipes a little better,” he commented on X. The real takeaway here is the SEC’s readiness to treat crypto as a legitimate asset class.
