The United Kingdom is preparing to lift a long-standing ban on a key type of crypto investment product as part of a broader effort to catch up with the United States and other leading financial centers in the race to become a global hub for digital assets.
On Friday, the Financial Conduct Authority (FCA), the U.K.’s main financial regulator, proposed reversing its 2019 ban on crypto exchange-traded notes (ETNs) for retail investors. ETNs are debt instruments tied to specific assets — in this case, cryptocurrencies — that provide investors with regulated access to digital tokens via public exchanges.
The FCA originally prohibited the sale of crypto ETNs to retail investors due to concerns about consumer harm. However, in its new proposal, the regulator emphasized that lifting the ban would support economic growth and competitiveness in the U.K.’s crypto sector. The restriction on crypto derivatives, however, will remain in effect.
“This consultation demonstrates our commitment to supporting the growth and competitiveness of the U.K.’s crypto industry,” said David Geale, the FCA’s executive director of payments and digital assets. “We want to rebalance our approach to risk. Lifting the ban would empower consumers to decide whether these high-risk investments are suitable for them — with the understanding that they could lose all their money.”
Industry Reaction: A ‘Major Milestone’
The proposal was met with strong approval from crypto industry leaders, who view it as a pivotal moment for the U.K.’s digital asset landscape. The U.K. has often been seen as trailing behind the U.S., EU, and other jurisdictions in developing a robust crypto framework.
The U.S., for instance, launched spot bitcoin ETFs last year after the Securities and Exchange Commission approved rule changes to enable their creation. Meanwhile, the U.K. government released draft legislation in April aimed at positioning the country as a “world leader in digital assets.” The FCA is also working on a roadmap of consultations and policy papers to introduce a comprehensive crypto regulatory regime by 2026.
“Until now, the U.K. has stood out for its restrictions on ETNs,” said Ian Taylor, board advisor at CryptoUK. “We hope this move not only improves consumer protections but also leads to broader access to well-regulated crypto products.”
Bivu Das, U.K. General Manager at crypto exchange Kraken, called the proposal a “major milestone” for the country’s crypto ecosystem. “The FCA is acknowledging that the market has matured and that the existing restrictions are outdated,” he said. “Regulatory progress like this is essential for the U.K. to remain competitive in the global digital asset race.”
