The UK Financial Conduct Authority (FCA) is set to lift its ban on crypto exchange-traded notes (ETNs), paving the way for British savers to have easier access to crypto investments. This move could potentially unlock up to $1 trillion in savings for the crypto sector. ETNs are debt securities that track the price of an underlying asset and trade on exchanges similar to exchange-traded funds (ETFs), providing investors with a simple way to gain exposure to the asset without owning it directly.
The ban on crypto ETNs was introduced by the FCA in January 2021, preventing retail investors from buying or marketing crypto ETNs and derivatives linked to unregulated assets. However, this restriction is set to be lifted on October 8, which could position the UK as one of Europe’s largest crypto markets.
Dan Gold, founder of Stratiphy, an AI-powered investment platform, believes that the UK has the potential to become the largest crypto market in Europe, especially if crypto becomes eligible for Individual Savings Accounts (ISAs) and Self-Invested Personal Pension (SIPP) accounts.
One of the key questions surrounding the lifting of the ban is whether crypto ETNs will qualify for tax-advantaged accounts like ISAs and SIPPs. These accounts hold over $930 billion in assets, and if ETNs are deemed eligible, it could lead to a significant influx of capital into the crypto markets. However, the eligibility criteria for these accounts remain unclear, pending formal guidance from the tax authority, HMRC.
The policy change by the FCA comes as UK regulators refocus on digital assets after a hiatus following the 2024 general election. A cross-party parliamentary group has resumed efforts to prioritize crypto legislation, and the FCA has initiated a consultation on new crypto rules. Additionally, the UK and the US have established a joint taskforce to enhance cooperation on crypto regulation and financial oversight.
Research indicates that the end of the ban on crypto ETNs could trigger a surge in crypto adoption. A survey conducted by Norstat for IG found that 30% of investors would consider buying crypto through ETNs, representing a significant increase from the 12% of UK adults who held crypto in late 2024.
IG, Freetrade, and other platforms are gearing up to offer crypto ETNs to customers once regulations allow. These ETNs will provide investors with a regulated and familiar platform to access crypto investments, potentially reshaping how British savers engage with crypto assets.
While the FCA is easing restrictions on ETNs, crypto exchange-traded funds (ETFs) will remain banned for the time being. Nevertheless, the upcoming rule change could open up a significant new investment channel for British savers and position the UK as a major player in the European crypto market.