The UK's Financial Conduct Authority (FCA) has lifted the ban on retail investors accessing cryptocurrency exchange-traded notes (cETNs).
According to an announcement released by the FCA on Friday, UK companies will soon be able to offer cETNs to retail consumers, with the regulatory change taking effect on October 8.
This new development in the UK's regulatory approach comes after the FCA banned cryptocurrency ETNs in January 2021, citing the extreme volatility of crypto assets and the "lack of legitimate investment demand" from retail consumers.
David Geale, FCA's Executive Director of Payments and Digital Finance, stated in the announcement: "Since we restricted retail investors' access to cETNs, the market has evolved, and the products have become more mainstream and better understood."
Unlike cryptocurrency exchange-traded funds (ETFs) that track the prices of custodial underlying assets like Bitcoin (BTC), cryptocurrency ETNs are not backed by any underlying assets and represent debt securities.
Austrian crypto trading platform Bitpanda described ETNs as follows: "Each trading note of an ETN is not a fund equity but represents the obligation of a legal entity that holds the underlying assets as collateral."
By investing in ETNs that track cryptocurrencies, investors can gain exposure to physical crypto assets through their regular brokers or banks.
Bitpanda noted that ETNs carry risks such as limited control over their assets, highlighting the importance of purchasing ETNs from reputable institutions to ensure safety.
While cryptocurrency ETNs are now permitted, the UK FCA has yet to make a decision on whether to allow retail investors access to cryptocurrency derivatives, which were banned alongside ETNs in 2021.
The regulator stated: "The FCA will continue to monitor market developments and consider their approach to high-risk investments."
According to crypto analytics platform TokenInsight, cryptocurrency derivatives, such as crypto futures, options, and perpetual contracts, showed resilience in the second quarter of 2025, with a trading volume of $20.2 trillion.
In contrast, centralized exchange (CEX) trading volumes plummeted by 22%, in stark contrast to cryptocurrency ETFs.
Since their historic launch in the US in 2024, cryptocurrency ETFs have seen significant growth, with issuers like BlackRock experiencing a 370% surge in inflows in the second quarter of 2025, breaking multiple records for crypto funds.
On Tuesday, the US Securities and Exchange Commission (SEC) made another key decision regarding cryptocurrency ETFs, authorizing issuers to create and redeem physical assets or exchange ETF shares for underlying crypto assets.
While this move is widely seen as significant news for the crypto industry, ETF analysts like Eric Balchunas noted that the impact on retail investors may be minimal.
Balchunas posted on the X platform on Tuesday: "This has little impact on retail; it's more of a pipeline fix. It just makes the pipeline a bit better." He added that the biggest takeaway from this milestone is the SEC's readiness to consider cryptocurrencies as a legitimate asset class.
Related: South Korea to Regulate Leveraged Cryptocurrency Lending Services with New Rules
Original article: “UK Regulator Lifts Ban on Crypto ETNs by Retail Investors”
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