UK Unbans Crypto ETNs For Retail, Futures Still Restricted

The UK’s Monetary Conduct Authority (FCA) has lifted the ban on retail entry to cryptocurrency exchange-traded notes (cETNs).

Firms within the UK will quickly have the ability to provide retail shoppers cETNs, with regulatory adjustments efficient Oct. 8, according to an FCA announcement on Friday.

The brand new improvement within the UK’s regulatory strategy on crypto comes after the FCA banned crypto ETNs in January 2021, citing the intense volatility of crypto belongings and a “lack of official funding want” for retail shoppers.

“Since we restricted retail entry to cETNs, the market has advanced, and merchandise have turn out to be extra mainstream and higher understood,” David Geale, FCA government director of funds and digital finance, mentioned within the announcement.

What are crypto ETNs?

In contrast to cryptocurrency exchange-traded funds (ETFs), which monitor the worth of underlying belongings like Bitcoin (BTC) in custody, crypto ETNs aren’t backed by any underlying belongings and symbolize debt securities.

“As a substitute of fairness within the fund, every traded word of an ETN represents an obligation from a authorized entity holding the underlying asset as collateral,” according to the ETN description by the Austrian crypto buying and selling platform Bitpanda.

By investing by an ETN monitoring crypto, buyers can acquire publicity to bodily crypto belongings through their common brokers or banks.

ETNs are related to dangers like restricted management over their belongings, which underscores the significance of buying ETNs from respected establishments to make sure security, Bitpanda mentioned.

Crypto derivatives nonetheless banned

Whereas permitting crypto ETNs, the UK FCA is but to decide on whether or not to permit retail buyers to entry crypto derivatives, which the authority banned alongside ETNs in 2021.

“The FCA will proceed to watch market developments and take into account its strategy to high-risk investments,” the regulator said.

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Crypto derivatives, or merchandise comparable to crypto futures, choices and perpetual contracts, have proven resilience within the second quarter of 2025, with volumes netting $20.2 trillion, based on the crypto analytics platform TokenInsight.

In distinction, centralized exchanges’ (CEXs) volumes plummeted by 22%, exhibiting an enormous distinction to cryptocurrency ETFs.

US permits in-kind for crypto ETFs: No influence on retail

Cryptocurrency ETFs have seen exceptional progress since their historic launch in the US in 2024, with issuers like BlackRock posting a 370% surge in inflows in Q2 2025 and crypto funds breaking a number of data.

On Tuesday, the US Securities and Alternate Fee (SEC) delivered one other essential resolution on crypto ETFs, authorizing issuers to proceed with in-kind creations and redemptions or to alternate ETF shares for the underlying crypto belongings.

Though the transfer is basically seen as huge information for the crypto trade, ETF analysts like Eric Balchunas say that the occasion will probably have little to no influence on retail buyers.

“It’s not a big impact to retail however extra of a plumbing repair. It simply makes the pipes a bit higher,” Balchunas said in an X put up on Tuesday. The largest takeaway from the milestones is that the SEC is able to deal with crypto like a legit asset class, he added.