Back in June, the FCA proposed easing rules that have been in place since January 2021 and which prevent consumers from buying exchange-traded notes that track crypto coins such as bitcoin and ethereum. ETNs are debt securities that track an underlying asset but are traded on a stock exchange. They have grown in popularity in recent years and around 12% of British adults now own some form of cryptocurrency, compared with around 4% in 2021.
Following consultation, the FCA has nowannouncedthat firms will be able to give retail consumers access to crypto-exchange traded notes (cETNs) from 8 October 2025.
Crypto ETNs that retail consumers can access must be traded on an FCA-recognised, UK-based investment exchange (a Recognised Investment Exchange or RIE). Financial promotion rules will apply, so consumers get the right information and aren't offered inappropriate incentives to invest.
TheConsumer Dutywill apply to firms offering these products to retail investors. However, there won't be coverage from theFinancial Services Compensation Scheme (FSCS), and so consumers should ensure they understand the risks before deciding to invest.
This is the latest development as the FCA continues to establish a regulatory framework for crypto. It has outlined itscrypto roadmapand recently published proposals on stablecoins as well as other aspects of the regime.
The FCA's ban on retail access to cryptoasset derivatives will remain in place. The FCA will continue to monitor market developments and consider its approach to high-risk investments.
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