The UK Financial Conduct Authority (FCA) has removed the ban on retail access to cryptocurrency exchange-traded notes (CETNs).
Starting October 8th, UK businesses will be able to offer CETN to retail consumers, marking a significant regulatory change as announced by the FCA on Friday.
This shift comes after the FCA had previously prohibited the sale of crypto ETNs back in January 2021, citing extreme volatility in crypto assets and a perceived lack of genuine investment needs for retail investors.
David Geale, the FCA’s executive director of payments and digital finance, noted that since retail access to CETNs was restricted, the market has evolved. He suggested that these products are now more mainstream and understood better by consumers.
What is a crypto ETN?
Crypto ETNs differ from cryptocurrency exchange-traded funds (ETFs) in that they don’t track the price of actual assets like Bitcoin (BTC). Instead, they represent debt securities that are not backed by underlying assets.
“Each ETN transaction memo stands for an obligation from a corporation that holds the underlying assets as collateral,” according to Bitpanda, an Austrian crypto trading platform.
Through ETNs, investors can gain exposure to actual crypto assets by using traditional brokers or banks.
However, Bitpanda also cautions about the risks involved with ETNs, particularly the limited control investors have over their assets, underscoring the importance of choosing reputable agencies for purchases.
Crypto derivatives remain prohibited
While the FCA has greenlit crypto ETNs, they have not yet made a decision regarding retail access to crypto derivatives, which were also banned in 2021.
The FCA stated that they will keep monitoring market developments and remain open to reconsidering their stance on risky investments.
Products linked to crypto derivatives, including futures and options, reportedly performed well in the second quarter of 2025, generating a significant volume of $20.2 trillion, according to TokenInsight, a crypto analytics platform. In contrast, trading volumes on centralized exchanges plummeted by 22%, highlighting a stark difference from crypto ETFs.
The US and physical crypto ETFs: minimal impact on retail
Since the US launched its first physical crypto ETFs in 2024, companies like BlackRock have seen significant growth, with a notable 370% increase in inflows during the second quarter of 2025.
This past Tuesday, the Securities and Exchange Commission (SEC) made a significant move by allowing publishers to exchange ETF shares for actual crypto assets, something many view as a landmark moment for the crypto industry. However, ETF analysts like Eric Balchunas have expressed that this change may not have much effect on retail investors.
In Balchunas’s view, the situation primarily involves logistical improvements rather than a significant change for everyday investors. He emphasized that the main takeaway from this development is the SEC’s growing recognition of crypto as a legitimate asset class.
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