TL;DR
- The FCA plans to authorize UK retail investors to trade crypto cETNs on regulated exchanges, lifting a restriction in place since 2021.
- The move aims to bring the UK in line with markets like the US and the EU, offering access to regulated instruments without directly holding crypto.
- The regulator will keep its ban on crypto derivatives for retail investors and continues working on regulations for stablecoins, exchanges, and custody, with full implementation expected in 2026.
The UK’s Financial Conduct Authority (FCA) has announced plans to lift the ban that prevented retail investors from accessing crypto exchange-traded notes, known as cETNs. This decision will allow these products, previously restricted to professional investors, to be traded by individuals through investment exchanges recognized by the regulator.
The measure seeks to modernize access conditions for financial products linked to crypto assets in the UK and align the country with markets like the United States, Canada, Hong Kong, and several European Union nations. cETNs are debt securities issued by financial institutions that mirror the performance of an asset, deducting fees and expenses, but without directly holding the underlying tokens or cryptocurrencies.
Since January 2021, the FCA had prohibited the sale, marketing, and distribution of crypto derivatives and cETNs to retail investors. In 2024, it allowed their sale to institutional clients through platforms operating under strict controls. Marking the first regulatory step forward in this category. The new proposal aims to expand that initial opening by giving individuals the option to invest in cETNs. Under rules requiring clear disclosure of risks and the elimination of inappropriate promotional incentives.
The FCA Consults on Stablecoins, Exchanges, Custody, and More
The announcement is part of a public consultation included in the FCA’s quarterly regulatory report. Aimed at reducing restrictions for firms in the sector and boosting economic competitiveness. There’s no set date for the implementation of these changes. Although the regulator is expected to finalize them once the consultation period ends and feedback is assessed.
The ban on crypto derivatives for retail investors remains in place. As does the restriction preventing UK investors from directly accessing spot Bitcoin ETFs listed on foreign markets. However, this policy shift acknowledges the market’s growing maturity and rising demand for new regulated instruments.
The UK continues to advance gradually in the regulation of crypto assets. In parallel, the FCA is conducting consultations on rules for stablecoins. Exchanges, lending and staking services, and crypto custody, with the final framework expected by 2026.
