Key Takeaways
- The FCA proposes lifting its ban on Bitcoin ETNs for UK retail investors.
- Spot Bitcoin ETFs remain prohibited under current UK regulation.
- The consultation is open through July 31 and includes safeguards like risk disclosures.
The Financial Conduct Authority (FCA) has proposed lifting its ban on retail trading of exchange-traded notes (ETNs) tied to Bitcoin, marking a major shift in UK digital asset policy.
The proposal would permit retail investors to buy regulated Bitcoin ETNs listed on recognized exchanges, such as the London Stock Exchange.
Regulatory update & consumer protection
Announced June 6, the move is part of the FCA’s broader regulatory update aimed at balancing innovation with consumer protection.
Under the plan, retail investors would be allowed to access ETNs if the products meet UK financial promotion standards, include risk disclosures, and avoid aggressive incentives.
Reversal of 2021 policy
The change would reverse a policy enacted in 2021 that blocked retail access to crypto derivatives and ETNs.
However, the ban on crypto derivatives will remain. FCA executive director David Geale said the new approach is designed to “rebalance” risk tolerance by allowing consumers more freedom to make investment decisions.
Spot Bitcoin ETFs still prohibited
Despite the shift, spot Bitcoin ETFs remain prohibited in the UK. The FCA emphasized that this proposal does not extend to spot ETF products like those available in the U.S., such as BlackRock’s iShares Bitcoin Trust.
Potential impact on retail investors
If adopted, retail investors could trade sterling-denominated ETNs already available to professional investors, such as products from 21Shares, WisdomTree, and ByteTree.
Consultation period
The consultation runs through July 31 and reflects the FCA’s alignment with EU-style ETN frameworks, where over 300 Bitcoin-linked ETNs are already listed on platforms like Xetra.
