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 be capable of supply retail shoppers cETNs, with regulatory modifications 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 acute volatility of crypto property and a “lack of respectable funding want” for retail shoppers.

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

What are crypto ETNs?

In contrast to cryptocurrency exchange-traded funds (ETFs), which observe the value of underlying property like Bitcoin (BTC) in custody, crypto ETNs are usually not backed by any underlying property and symbolize debt securities.

“As a substitute of fairness within the fund, every traded notice 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 means of an ETN monitoring crypto, traders can get hold of publicity to bodily crypto property through their common brokers or banks.

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

Crypto derivatives nonetheless banned

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

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

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

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

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

Cryptocurrency ETFs have seen exceptional development 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 Trade Fee (SEC) delivered one other essential choice on crypto ETFs, authorizing issuers to proceed with in-kind creations and redemptions or to trade ETF shares for the underlying crypto property.

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

“It’s not a big impact to retail however extra of a plumbing repair. It simply makes the pipes a bit of 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.