The UK's financial regulator has lifted the ban on retail investors accessing cryptocurrency exchange-traded notes (cETNs), a move welcomed by industry leaders and seen as a step towards aligning the country with the global crypto market and strengthening its position as a digital asset hub.
On Friday, the Financial Conduct Authority (FCA) revoked the ban on retail investor access to cETNs, with the regulatory change set to take effect on October 8. The ban was implemented in January 2021, citing extreme volatility and a "lack of legitimate investment demand."
The reversal of the cETN ban reflects a shift in the regulator's stance towards crypto assets. An FCA executive stated in a release that the decision reflects the evolution of the market and a deeper understanding of crypto-related products.
As the FCA lifts the ban, observers and industry stakeholders shared their views on this development. Some praised the move as a step forward, while others criticized the UK with irony.
"We are pleased to see this reversal," said Ian Taylor, director advisor of CryptoUK and COO of HT Digital. "So far, the UK has been an exception in terms of ETNs. This change reflects the progress we have made in introducing a more moderate approach to consumer risk."
Taylor told Cointelegraph that CryptoUK, a trade association for the digital asset industry, has been lobbying for broader access to regulated products like ETNs, which track the performance of crypto assets without requiring direct ownership.
Riccardo Tordera, director of policy and government relations at The Payments Association, also expressed the same optimism as Taylor:
Tordera told Cointelegraph that the FCA's decision allows individuals to "make their own choices at their own risk."
He stated that restricting access to cETNs put the UK at a disadvantage and weakened its global competitiveness.
"This is a welcome move," he added. "The FCA's ban was extremely protective, and it has already been eased since professional investors were allowed access last year."
While some welcomed the move, skeptics also voiced their opinions. WallStreetBets founder Jamie Rogozinski summarized the moment with irony, saying, "The UK loves financial risk—just not the kind that involves vegetables or industrial policy."
Although the FCA has lifted the ban on cETNs, the regulator clarified that crypto derivatives remain prohibited.
"The FCA's ban on retail access to crypto asset derivatives will remain in effect," the FCA stated on Friday.
Crypto derivatives include futures, options, and perpetual contracts. The regulator added that it will monitor market developments and consider its stance on high-risk investments.
Related: European Central Bank (ECB) makes it clear: Digital euro process accelerates, but cash's status remains irreplaceable
Original article: “UK Policy Shift: Approving Retail Trading of Crypto ETNs, Aiming to Build a Crypto Hub”
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