The UK government has finally lifted its ban on cryptocurrency exchange certificates, citing a maturing industry and greater understanding of digital asset products.
In an announcement on Wednesday, the Financial Conduct Authority (FCA) outlined that retail investors can now access cryptocurrency ETNs via FCA-approved exchanges based in the UK.
Cryptocurrency exchange-traded bonds are fixed income products that allow investors to gain exposure to cryptocurrencies without owning the underlying assets. These types of products are essentially traded like any other security, and the underlying cryptocurrency is held securely by a regulated custodian.
“Since restricting retail access to crypto ETNs, the market has evolved and the product has become more mainstream and better understood. With this in mind, we are offering consumers more choice while ensuring protections are in place,” David Geal, FCA’s executive director of payments and digital finance, said as part of the announcement.
The ban on virtual currencies, ETNs, first came into effect in January 2021, with the FCA stating that it considered “these products to be unsuitable for retail consumers due to the harm they pose.” He also argued that at the time, these crypto products “lacked a legitimate investment need.”
The FCA’s latest move marks a significant shift in tone after the government has gradually warmed to the crypto sector over the past few years. The country is awaiting the development of a comprehensive framework following a change in government leadership in July.
As part of the announcement, the FCA also said that “the ban on retail access to crypto asset derivatives remains in place”, adding that it will continue to “monitor market developments and consider our approach to high-risk investments”.
The use of virtual currency ETN for retirement funds is permitted
In addition to lifting the ban on crypto ETNs, the UK government also issued a policy statement regarding the tax treatment of these crypto products in certain types of tax-efficient investment accounts.
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The government will allow cryptocurrencies ETNs to be held in “registered pension schemes” from October 8, and will open up access to personal savings accounts for stocks and shares from April 2026, meaning citizens will have several tax-advantaged investment options for these products.
“The Government will continue to support the UK’s growing crypto asset sector and continue to develop a comprehensive regulatory framework that fosters innovation while protecting consumers,” the statement said.
Preparing the market for growth with crypto ETNs
A recent research report by IG Group predicts that the UK crypto market could grow by up to 20% due to the resumption of crypto ETNs.
The report bases its prediction on its own research, which found that “30% of UK adults would consider investing in cryptocurrencies via ETNs”, with the main attraction being the “security and regulatory oversight” these products offer.
“This indicates that crypto ownership could rise significantly from current levels: 12% according to the latest FCA research and 25% according to new research from IG.”
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